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					HANDICRAFT SECTOR in
AQABA – DIAGNOSTIC,
STRATEGY and ACTION PLAN

AQABA COMMUNITY and ECONOMIC DEVELOPMENT (ACED)
PROGRAM




August 23, 2008 [Revised as of September 24, 2008]- Final

This publication was produced for review by the United States Agency for International
Development. It was prepared by Rana Akhal, Ahlam Shabaneh and Carol Tyroler for AECOM
International Development under the Aqaba Community and Economic Development (ACED)
Program.




                                    Aqaba Community and Economic Development (ACED) Program –i
                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
HANDICRAFT SECTOR in
AQABA – DIAGNOSTIC,
STRATEGY and ACTION PLAN
DEVELOPMENT (ACED)
PROGRAM

AQABA COMMUNITY AND ECONOMIC DEVELOPMENT (ACED)
PROGRAM




 DISCLAIMER

 The author's views expressed in this publication do not necessarily reflect the views of the
 United States Agency for International Development, AECOM International Development
 or the ACED Program.




                                         Aqaba Community and Economic Development (ACED) Program –ii
                                           Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 CONTENTS
EXECUTIVE SUMMARY ................................................................................................................................. 1

I.         OBJECTIVES AND METHODOLOGY............................................................................................. 3

      A.     STUDY OBJECTIVES....................................................................................................................................... 3
      B.     APPROACH AND METHODOLOGY .................................................................................................................... 3

II.          DIAGNOSTIC OF HANDICRAFT SECTOR .............................................................................. 5

      A.     OVERVIEW OF HANDICRAFTS IN JORDAN .......................................................................................................... 5
      B.     OVERVIEW OF HANDICRAFTS IN AQABA ........................................................................................................... 9
              I.      ORGANIZATIONS WORKING IN CRAFTS ................................................................................................... 10
              II.     OVERALL FAILURE OF PAST INITIATIVES .................................................................................................... 11
      C.            VALUE CHAIN PARTICIPANTS..................................................................................................................... 14

III.         PRODUCT DEVELOPMENT AND PRODUCTION DIAGNOSTIC .................................. 16

      A.     OVERVIEW................................................................................................................................................ 16
      B.     PRODUCTS CURRENTLY PRODUCED IN AQABA ................................................................................................. 16
      C.     CORE STRENGTHS IN PRODUCT POTENTIAL .................................................................................................... 20
      D.      RESULTS FROM TOURIST PREFERENCE SURVEY ................................................................................................ 20
      E.     SWOT ANALYSIS PRODUCT DEVELOPMENT AND PRODUCTION .......................................................................... 21

IV.          MARKET DIAGNOSTIC ................................................................................................................ 26

      A.     DESCRIPTION OF MARKET IN AQABA.............................................................................................................. 26
      B.     MARKET SIZE, EXISTING OPPORTUNITY AND DETERMINANTS ............................................................................ 28
      C.     SURVEY METHODOLOGY AND ANALYSIS ......................................................................................................... 29
              i. Survey Methodology ........................................................................................................................ 30
              ii.       Foreign Tourists Survey Analysis ....................................................................................................... 30
              iii. Jordanian Tourists Survey Analysis .................................................................................................... 32
      D.            SWOT ANALYSIS REGARDING HANDICRAFTS MARKETING ............................................................................. 34

V.           ORGANIZATIONAL AND HUMAN RESOURCE DIAGNOSTIC ...................................... 38

      A.     MANAGEMENT OF THE SECTOR IN AQABA ...................................................................................................... 38
      B.     PRODUCERS’ CAPACITY................................................................................................................................ 40
      C.     ENABLING ENVIRONMENT ........................................................................................................................... 44
              i. An Encouraging Legislative Environment ........................................................................................... 44
              ii.       Access to Finance ............................................................................................................................ 44
      D.      KEY ORGANIZATIONAL CHALLENGES ............................................................................................................ 47
      E.     SWOT ANALYSIS INSTITUTIONAL CAPACITY .................................................................................................... 49




                                                                           Aqaba Community and Economic Development (ACED) Program –iii
                                                                              Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
VI.          SECTOR STRATEGY ..................................................................................................................... 51

   A.      INTRODUCTION......................................................................................................................................... 51
        1.      Vision and Overall Objective............................................................................................................. 51
        2.          Strategy .......................................................................................................................................... 51
   B.      STRATEGY FOR PRODUCT DEVELOPMENT AND PRODUCTION ............................................................................. 51
        1.     Priority Product Analysis ................................................................................................................... 52
        2.          Strategy Components ...................................................................................................................... 53
        Pillar I: New Product Development and New Designs ................................................................................... 54
        Pillar II: Training and Learning Initiatives ...................................................................................................... 56
        Pillar III: Horizontal and Vertical Linkages Created ....................................................................................... 58
   C.      MARKETING STRATEGY ............................................................................................................................... 59
        1.     Overall Marketing Strategy .............................................................................................................. 60
        Pillar I: Increase Market Access ................................................................................................................... 60
        Pillar II: Branding and Promotion ................................................................................................................. 62
   D.        INSTITUTIONAL DEVELOPMENT ................................................................................................................ 63
        PILLAR 1: Business-Enabling Environment .................................................................................................... 65
        PILLAR II: Producer’s Capacities ................................................................................................................... 66
        PILLAR III: Handicrafts Sector Regulation and Management .......................................................................... 66

VII.         ACTION PLAN ................................................................................................................................ 68

VIII. ANNEXES.......................................................................................................................................... 89

         ANNEX 1: SCOPE OF WORK ....................................................................................................... 90

         ANNEX 2: LIST OF INTERVIEWS ............................................................................................... 93

         ANNEX 3: ILLUSTRATIVE PROJECT COSTS......................................................................... 95

         ANNEX 4: METHODOLOGY FOR SELECTION OF PRODUCT AREAS........................ 106

         ANNEX 5: HISTORICAL PRODUCTS ONCE PRODUCED IN AQABA ......................... 109




                                                                         Aqaba Community and Economic Development (ACED) Program –iv
                                                                            Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
             ACED Program Frequently-Used Acronyms and Abbreviations
             (Not all of the following will appear in every ACED Program document)




ACDF          Aqaba Community Development Fund
ACED          Aqaba Community and Economic Development program (USAID)
ACT           Aqaba Container Terminal
ADC           Aqaba Development Corporation
ADS           Automated Directive Systems
AEGP          Afghanistan Economic Governance Project
AGDTF         Aqaba Garment Development Task Force
AI            AECOM International
AIDAR         Acquisition Regulation (USAID)
AIIE          Aqaba International Industrial Estate
AMIR          Achievement of Market-Friendly Initiatives and Results project (USAID)
APC           Aqaba Ports Corporation
ASDC          Aqaba Skills Development Center
ASDP          Aqaba Skills Development Program
ASEZ          Aqaba Special Economic Zone
ASEZA         Aqaba Special Economic Zone Authority
ASRI          Aqaba Skills Readiness Index
ASYCUDA       Automated System for Customs Data
ATASP         Aqaba Technical Assistance Support program (USAID)
AUC           Aqaba University College
AVC           Audiovisual Commission of Jordan
AZEM          Aqaba Zone Economic Mobilization project (USAID)
B.A.          Bachelors of Arts
B.S./B.Sc.    Bachelors of Science
BA            Business Association
BAFO          Best and Final Offer
BB&T          Branch Banking and Trust
BDC           Business Development Center
BDS           Business Development Services
CAB           Community Advisory Board
CAD           Computer-aided Design
CBO           Community Based Organization
CCN           Cooperating Country National
CDC           Community Development Councils
CEDAW         Convention on the Elimination of All Forms of Discrimination Against Women
CEO           Chief Executive Officer
CGAP          Certified Government Auditing Professional
CHF           Cooperative Housing Foundation International
CIDA          Canadian International Development Agency
CMT           Cut-Make-Trim
CO            Contracting Officer


                                         Aqaba Community and Economic Development (ACED) Program –i
                                           Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
COB       Close of Business
COO/CFO   Chief Operating Officer/Chief Financial Officer
COP       Chief of Party
COTS      Caribbean Open Trade Support project
CP        Cost Proposal
CRM       Customer Relationship Management
CSO       Civil Society Organization
CSP       Community Service Program
CSR       Corporate Social Responsibility
CTO       Cognizant Technical Officer
D&G       Democracy and Governance
DCA       Development Credit Authority
DCAA      Defense Contract Audit Agency
DQA       Data Quality Assessments
ECI       Environmental Compliance Index
EG        Economic Growth
EGRA      Early Grade Reading Assessment
EIA       Environmental Impact Assessment
EJADA     Euro-Jordanian Action for the Development of Enterprise Program
EJEP      Euro-Jordanian Export Program
EO        Economic Opportunities Office
EOI       Expression of Interest
EPC       Executive Privatization Commission
ERfKE     Education Reform for a Knowledge Economy (USAID)
ERPS      Enterprise Registration and Permitting System
ETF       European Training Foundation
EU        European Union
FAR       Federal Acquisition Regulation (US Government)
FDI       Foreign Direct Investment
FDR       Fixed Daily Rate
FHR       Fixed Hourly Rate
FTA       Free Trade Agreement
FZC       Free Zones Corporation
GDA       Global Development Alliance
GDP       Gross Domestic Product
GEM       Gender Entrepreneurship Markets
GIS       Geographic Information System
GOJ       Government of Jordan
GPS       Global Positioning System
GSP       Global Supplier Program
HO        Home Office
HR        Human Resources
HRD       Human Resource Development
HRM       Human Resource Management
ICDL      International Computer Driving License
ICT       Information and Communications Technology
IFC       International Finance Corporation

                                        Aqaba Community and Economic Development (ACED) Program –ii
                                          Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
IFS          Integrated Financial System
ILO          International Labor Organization
IMF          International Monetary Fund
INJAZ        Economic Opportunities for Jordanian Youth Program (formerly USAID)
IPR          Intellectual Property Rights
IQC          Indefinite Quantity Contract
IRR          Internal Rate of Return
ISEP         Industrial Skills Enhancement Program
ISP          Internet Service Provider
IT           Information Technology
IZDIHAR      Iraq Private Sector Growth and Employment Generation Project
JD           Jordanian Dinar
JEDCO        Jordan Enterprise Development Corporation
JHPA         Jordan Handicrafts Producers Association
JHTA         Jordan Handicrafts Traders Association
JIB          Jordan Investment Board
JIEC         Jordan Industrial Estates Corporation
JITOA        Jordan Inbound Tour Operators Association
JNA          Jordan National Agenda
JNCW         Jordanian National Commission for Women
JOHUD        Jordan Hashemite Fund for Development
JREDS        The Royal Marine Conservation Society of Jordan
JSCED        Jordan Standard Classification of Education
JRF          Jordan River Foundation
JSSD         Jordanian Society for Sustainable Development
JUMP         Jordanian Upgrading and Modernization Program
JUSBP        Jordan-United States Business Partnership
JUSFTA       Jordan-United States Free Trade Agreement
KOJ          Kingdom of Jordan (the country within its physical boundaries)
LAC          Latin America and the Caribbean
LCDC         Local Community Development Center
LCDD         Local Community Development Directorate
LECP         Local Employee Compensation Plan
LLB          Bachelor of Law
LLM          Master of Laws
LOE          Level of Effort
LTTA         Long Term Technical Assistance
M&E          Monitoring and Evaluation
M.A.         Masters of Arts
M.S./M.Sc.   Masters of Science
MASAQ        The Rule of Law project (USAID)
MBA          Masters of Business Administration
MDA          Master Development Agreement
MENA         Middle East and Northern Africa
MFI          Microfinance Institution
MIS          Management Information System(s)
MNC          Multi-national Corporation


                                     Aqaba Community and Economic Development (ACED) Program –iii
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
MOF        Ministry of Finance
MOL        Ministry of Labor
MOPIC      Ministry of Planning and International Cooperation
MOTA       Ministry of Tourism and Antiquities
MOU        Memorandum of Understanding
MPA        Masters of Public Administration
MSME       Micro, Small and Medium Enterprise
NAHDAT     NAHDAT Al-Aqaba program (former name of the ACED Program)
NCHRD      National Center for Human Resources Development
NDA        Neighborhood Development Activity
NDC        Neighborhood Development Council
NET        Neighborhood Enhancement Team
NGO        Non-Governmental Organization
NHF        Noor Al-Hussein Foundation
NICRA      Negotiated Indirect Cost Rate Agreement
NTS        National Tourism Strategy
PACE       Participatory Action for Community Enhancement
PAIS       Post Audit Information System
PEP-MENA   International Finance Corporation Middle East Technical Assistance Program/Facility
PITA       Palestine Integrated Trade Arrangement
PMIS       Project Management Information System
PMP        Performance Monitoring Plan
PPP        Public/Private Partnership
PR         Public Relations
PRA        Participatory Rapid Appraisal
PRIZM      Promoting Industrial Zones and Investment Mobilization
PSA        Public Service Announcement
PSD        Private Sector Development
PWG        Planning Working Group
QA         Quality Assurance
Qa         Quarter of the ACED Program year, where "a" is the numbers of the quarter (1-4)
QC         Quality Control
QIZ        Qualifying Industrial Zone
QUDORAT    Near East Foundation Consortium
R&D        Research & Development
RFA        Request for Applications
RFP        Request for Proposal
RFQ        Request for Quotations
RIAL       Re-use for Industry, Agriculture and Landscaping
RSCN       Royal Society for Conservation of Nature
SABEQ      Sustainable Achievement of Business Expansion and Quality (USAID)
SB/SDB     Small Business/Small Disadvantaged Business
SEPAP      Second Emergency Public Administration Program
SEZ        Special Economic Zone
SFU        Satellite Factory Unit
SIYAHA     The Tourism Project (USAID)
SME        Small and Medium Enterprises

                                          Aqaba Community and Economic Development (ACED) Program –iv
                                             Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
SOW       Scope of Work
SPIRA     Streamlining Permits and Inspection Regimes Activities
STTA       Short Term Technical Assistance
SWOT       Strengths, Weaknesses, Opportunities and Threats
TA         Technical Assistance
TATWEER    Business & Export Development Project for Jordanian Enterprises (USAID)
TBD        To Be Determined
TCBS       Trade Capacity Building Support project
TFCB       Trade Facilitation and Capacity Building project
TMG        The Mitchell Group, Inc.
TO         Task Order
TOT        Training of Trainers
TP         Technical Proposal
TRIDE      Trilateral Industrial Development
TSG        The Services Group, Inc.
TVET       Technical and Vocational Education and Training
UNDP       United Nations Development Program
UNESCO     United Nations Educational, Scientific and Cultural Organization
UNIDO      United Nations Industrial Development
UNIFEM     United Nations Development Fund for Women
UNRWA      United Nations Relief and Works Agency
USAID      United States Agency for International Development
VP         Vice President
VTC        Vocational Training Corporation
WB         World Bank
WEDAT      Women’s Access to Entrepreneurial Development and Training
WEPIA      Water Efficiency and Public Information for Action
WTO        World Trade Organization
WTTP       Workforce Technical Transformation Program
           Year of the ACED Program contract duration, where "b" is the member of the project
Yb
           year (1-5)




                                    Aqaba Community and Economic Development (ACED) Program –v
                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
                                     Executive Summary

This document examines the Handicraft Sector in Aqaba, Jordan, the stakeholders that operate in
it and the nature of the relationships among them. A team consisting of three external consultants
-Carol Tyroler (International Handicraft and Business Consultant), Rana Akhal (Local Management
Consultant), and Ahlam Shabana (Local Marketing Consultant), were hired to conduct a diagnostic,
create a strategy and draft an action plan.
Over the past decade, tourism has become one of the world’s largest and fastest growing
industries, and destinations like Jordan are capturing a significant share of the growing market.
Petra has become one of the “Seven Wonders of the World,” and Jordan was recently ranked as
one of the safest countries in the Middle East in which to live or vacation. Handicrafts are not only
an integral part of the tourism experience, but money spent on handcrafts can play a major role in
lessening poverty in handicraft producing countries.
In stores throughout Jordan, Bedouin weavings, rugs, camel accessories, jewelry, pillowcases and
leather products compete with cheap imports from India, Pakistan, Egypt, China, and other Middle
Eastern nations. “Jordanian Handicrafts” are not well known outside of Jordan, due to insufficient
inputs in innovative and creative product development and design, and lack of branding efforts. All
of this makes it hard for tourists to decipher what is actually made in Jordan, resulting in tourists
investing little in handicrafts sales.
The Government of Jordan, aided by external donors, has begun to recognize the enormous
impact that tourism is having on the economy and the potential impact handicrafts can have on
local economies. However, investment and leadership in the sector has been split among different
public authorities, NGOs, voluntary societies and cooperatives that are competing for the same
funds and duplicating efforts. There is no official body that is responsible for developing crafts in
Jordan, and this has left the handicraft sector marginalized, without vision and not functioning to its
potential. External donors such as the European Union (EU) and United States Agency for
International Development (USAID) have also invested in handicraft programs in Jordan without
synergy, alignment or a comprehensive plan.
With the exception of several key players, the overall quality of Jordanian handicrafts is poor with
little or no differentiation or innovation in terms of designs, styles and dimensions. For the most
part there has been little effort to associate products with specific regions, producers, or cultural
heritage, leaving Jordan without a distinguished, unique handicraft industry.
Even though tourism in Aqaba continues to grow and continually attract new investment,
handicrafts as a sub-sector of tourism, remains relatively underdeveloped. Six core NGOs have
played a role in handicraft development in Aqaba, and there has been marginal private sector
involvement. Past handicraft projects in Aqaba have faltered, due to this having been weak and
insufficiently targeted, because of a number of core constraints. This has affected the sector’s
ability to compete and move forward.
The selection of handicraft products found in Aqaba is limited, overall quality is mediocre, and
products lack uniqueness. Exceptions to this are products made by the Noor al Hussein
Foundation (NHF), Jordanian Society for Sustainable Development (JSSD), and those designed by


                                            Aqaba Community and Economic Development (ACED) Program –1
                                              Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
the Royal Society for Conservation of Nature (RSCN). While there are almost 30 bazaars and
souvenir shops in Aqaba, only a few sell locally produced products.
Market and product development surveys were conducted to better understand the targeted
market. Tourists from Western Europe and Jordan make-up the largest segment of visitors to
Aqaba. Their preferences vary, as do their purchases of souvenirs.
A detailed (SWOT) analysis was conducted for each of the three core components: product
development and production, marketing, and organizational capacity and human resources. This
analysis is further described in detail in the main body of this document. Based on the diagnostic,
strategy and draft action plans were then developed for the sector.
Key findings indicate the need for a well-structured, supportive governing entity within the Aqaba
Special Economic Zone (ASEZ) that should take the lead in developing the sector. The business
incubator, a producer’s association, a taskforce, a design and exhibition center, and a certification
system for handicrafts produced in Aqaba will further aid in the development of the sector. New
innovative products should be developed and guided by experienced designers who will use the
cultural heritage and unique motifs of the area to create market-driven products. Study tours and
design competitions will stimulate peer learning and entrepreneurship. Core areas of training for
producers will include strategic planning, business planning, marketing strategies production, pricing
and costing, entrepreneurial skills, business basics, accounting, and marketing.
Sales of handicrafts continue to be confronted by obstacles in meeting the quantity, quality, and
cost demands of different segments of the market. For producers to be able to take advantage of
new economic opportunities and capture new market segments they need assistance to expand
their production capacity, upgrade the quality of their products to the standards demanded by
buyers, and overcome the many obstacles they face in meeting the requirements of the targeted
markets. Marketing efforts will focus on branding and promotion of market-driven and well-
designed products.




                                           Aqaba Community and Economic Development (ACED) Program –2
                                             Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 I. OBJECTIVES and METHODOLOGY


           a. Study Objectives
This document examines the Handicraft Sector in Aqaba, Jordan, the stakeholders that
operate in it and the nature of the relationships among them. It is based on qualitative and
quantitative primary and secondary data collected and analyzed during April, May and June
of 2008. The objectives of this analysis were to:
   1. Conduct a diagnostic of the handicraft sector in Aqaba, identifying potentialities and
      opportunities for the development of the sector, as well as its threats and
      challenges.
   2. Design a detailed strategy and action plan for the handicraft sector in Aqaba that
      includes:
           i.   A Product Analysis Plan;
           ii. A Marketing Plan;
           iii. A Human Resources Capacity Building Plan; and
           iv. Recommendations to key decision makers and stakeholders within ASEZ
               and stakeholders in Jordan necessary to upgrade to a favorable environment
               for the development of the sector.



           b. Approach and Methodology
A team consisting of three external consultants, Carol Tyroler (International Handicraft
and Business Consultant), Rana Akhal (Local Management Consultant), and Ahlam Shabana
(Local Marketing Consultant), were hired to conduct a diagnostic, and create a strategy and
draft an action plan. Along with these consultants, Diala Al-Alami, Taher Ben Amor and
Qasem Nazzal, core team members for Component 2 of the Aqaba Community and
Economic Development (ACED) Program, helped with initial networking and setting-up of
interviews, as well as provided invaluable insight into the local context and inter-firm
dynamics. The team initially met on Sunday April 20th in Aqaba to discuss methodology and
begin outlining a work plan. From April 20 to April 24th, the analysis team conducted
qualitative interviews with key informants from current and past craft projects and
programs. Interviews were held in Aqaba and Wadi Rum. Overall work was divided
according to core areas of expertise: Product Development (Carol Tyroler), Market
Analysis (Ahlam Shabana) and Institutional Capacity (Rana Akhal) with team members
adding their insights and expertise in the other areas where applicable. The two local
consultants returned to Amman to continue with desk research, phone and in-person
interviews, and tourist and retail surveys.
                                      Aqaba Community and Economic Development (ACED) Program –3
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Carol Tyroler continued qualitative interviews in and around Aqaba, desk research and
coordinated efforts with the other two-team members. A work plan was devised, noting
key milestones, deliverables, team meetings and conference calls. The team synthesized
information from its research and met again on May 18-22 in Aqaba to share draft
diagnostics of the sector and discuss next steps in development of the strategy and action
plan. A second meeting was held in Aqaba May 31-June 2 to discuss further development of
the strategy and action plans pieces. From this meeting, a draft action plan was devised, an
initial log frame produced, discussion of strategy components finalized, and key deadlines
for completing the document were agreed upon. Drafts of the diagnostic, strategy and
action plan were sent to the International Consultant to formalize into the final document
to be delivered on June 20, 2008.




                                     Aqaba Community and Economic Development (ACED) Program –4
                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
  II. Diagnostic of Handicraft Sector

                a. Overview of Handicrafts in Jordan
Over the past decade, tourism has become one of the world’s largest and fastest growing
industries, and destinations like Jordan are capturing a significant share of the growing
market. Tourism in Jordan is a major driver of economic growth and has significant
potential for continued growth. More visitors are coming to the region and specifically to
Jordan to explore treasures like Petra, Wadi Rum, Aqaba and even Amman. Official figures
from the Ministry of Tourism revealed that 101,311 tourists on package tours visited
Jordan between January and March of 2008, compared to 68,279 in the same period in
2007. This represents a significant increase of 48.4% 1.
Petra and Wadi Rum are gaining recognition as unique, interesting destinations. Petra has
become one of the “Seven Wonders of the World” and Jordan was recently ranked as one
of the safest countries in the Middle East in which to visit and vacation. Aqaba, too, is
gaining fame and is being developed and marketed as one of the region’s central beach
resort destinations. All of these developments are impacting the influx of tourism to the
country.
Handicrafts are an integral part of the tourism experience. Whatever the type of tourism
(local or international), the tourist rarely fails to take home a souvenir. Handicrafts
represent local traditions and indigenous populations, and for tourists they symbolize the
places they visited, the experiences they had, a core memory they shared, a souvenir to
take to their friends and loved ones. The richness of handicrafts not only creates great
potential for tourism development in general, but also provides significant financial
opportunities for local artisans, cultural renewal and sustainability. Across the globe,
cultural destinations and associated purchases are winning more and more of tourists'
hard-earned cash. Worldwide handicrafts have played a significant role in job creation,
community advancement and the reduction of poverty. It is difficult to assess global
statistics for handicrafts, because the economic and social importance of the sector at a
national or global level is based on estimations and compilations of scattered, insufficient,
often unreliable and unsystematic data or on data that is not even comparable among
countries.
Previous experience proves that handicrafts can play a major role in lessening poverty in
developing countries. Most handicraft production use local, simple technology, as well as
locally found raw materials. Most handicraft production requires only small capital
investments compared to industrial products, and the producers face few barriers to entry.
Moreover, handicraft production can be done in homes where it fits into individual
lifestyles and time constraints of the family unit.
Around the globe, handicrafts have promoted countries’ identities and helped to boost the
development of their tourist sectors. In Tunisia for example, handicrafts were practically
non-existent 40 years ago. Now, the industry amounts to more than 1 billion US dollars
annually. A national handicraft holiday celebrates the importance of producers in the




1 Jordan   Times, Monday May 26, 2008
                                         Aqaba Community and Economic Development (ACED) Program –5
                                           Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
country and now the most important clients of handicrafts in Tunisia are Tunisians2. In
Vietnam, handicraft products have now become one of Vietnam's top ten export items,
adding more than US$1*109 annually to the country’s GDP, of which US$45 million are
exported to Japan alone. The sector generates jobs for thousands of workers from rural
areas who might not have other opportunities3. With the right mix of ingredients, Aqaba
can follow in these footsteps.
In Jordan, handicrafts are also part of the tourist’s experience. Interesting Bedouin
weavings, rugs, camel accessories, jewelry, pillowcases and leather cushions are items found
in souvenir shops and boutiques throughout Jordan. And while Jordan does have a heritage
of producing traditional handicrafts, handicrafts are not something that Jordan is uniquely
recognized for internationally. Like many other countries with a booming handicraft
industry, skills in weaving, pottery, sewing, crochet, embroidery, mosaics, jewelry, and
ceramics are found throughout Jordan. Yet due to insufficient inputs in innovative and
creative product development and design, and lack of branding efforts, “Jordanian
Handicrafts” are not well known outside of Jordan. This could change with additional
investment in creative product design and product development and with support by
integrated branding and marketing efforts.
When a tourist comes to Amman there is no central location to purchase handicrafts, and
one really has to explore to find such locations. While several handicraft stores exist, they
are not easy to find, nor listed in all of the travel guidebooks. Moreover, what one finds in
the stores are often imports from India, Pakistan, Egypt, China, or other Middle East
nations and it is hard to decipher what is actually made in Jordan. Key competing countries
and core products found in Jordan’s markets (tourist and regular) include products from
Syria: mother of pearl inlet furniture and accessories; Lebanon: hammered trays with
arabesque designs; India: pashmina shawls and scarves, inexpensive rayon and cotton
dresses; China: cheap shells, jewelry, clothing and toys; and Yemen: Jewelry.
The government of Jordan, aided by external donors, has begun to recognize the
enormous impact that tourism is having on the economy and the potential impact it can
have on local economies. In efforts to link tourism to potential poverty reduction and
income generation at the community level, handicrafts have begun to gain recognition as a
mechanism for such growth.
Lack of an overall plan and strategy has led to a fragmented and disconnected sector.
Investment and leadership in the sector has been split among different public authorities,
Non-Government Organizations (NGOs), voluntary societies, and cooperatives that are
competing for the same funds and duplicating efforts. As a result, there is no official body
that is responsible for developing crafts in Jordan, thus leaving the handicraft sector
marginalized and without vision. The Ministry of Industry and Trade, Ministry of Tourism
and Antiquities, Ministry of Social Development, and Ministry of Culture, all have funded
crafts programs in the past, but without alignment, documentation of lessons learned or
the fostering of horizontal and vertical linkages.
External donors such as the European Union and USAID have also invested in handicraft
programs in Jordan without synergy, alignment or a comprehensive plan. Currently the
Government of Jordan with funds from USAID has invested resources in handicraft
linkages to tourism in Karak, Irbid, Madaba, Petra, and Wadi Rum. The SABEQ program,
funded by USAID, is working to develop handicraft products in Karak and Irbid. Their


2 Discussion with Taher Ben Amor from the ACED Program
3 Embassy of Vietnam website and Vietnam Business Exporters(http: vnexporters.com)
                                             Aqaba Community and Economic Development (ACED) Program –6
                                               Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
overall strategy is focused on product development first, followed by fostering marketing
opportunities based on the products developed. The Siyaha Program, also a USAID funded
initiative, focused its current efforts in Petra and Wadi Rum. Siyaha was a three-year, $17
million project working with the Jordanian government, local communities, and tourism-
related institutions to develop a dynamic, competitive tourism industry. A 5-year follow on
project has been defined and was released for proposal submission at the time of preparing
this strategy. In Madaba, the Siyaha Program worked with local and national government
entities and businesses to create the Madaba Tourism Development Strategy and
Enterprise Development Program, whose main goal was to develop Madaba into a premier
tourism location. The strategy aimed to create a tourist destination "cluster" in the
governorate by capitalizing on the area's unique archaeological, natural and religious sites.
Handicraft development, while not the entire focus, was a core part of this strategy. The
European Union did a Tourism Marketing Strategy for Aqaba through 2010, but failed to
link handicraft development as a key area to be developed.
In addition to the above, there are two associations working to establish horizontal
linkages with the sector: a) The Jordan Handicrafts Traders Association (JHTA) which is
registered under the Ministry of Tourism and Antiquities (MOTA), and b) The Jordan
Handicrafts Producers Association (JHPA) which is registered under the Ministry of
Culture.
The mandate of JHTA, established in 2002, is the trading of handicrafts and souvenirs for
tourists regardless of their origin. The association is the official body for licensing
handicrafts producers and traders (factory, stores, or artisans) in cooperation with MOTA.
This is done through a committee composed of three members including Ministry
personnel charged with deciding what type of business their members’ fall under and
associated membership fees. Currently, the annual membership fee is 300 JD for factories
and stores, and 10 JD for artisans.
JHTA is producing an annual directory that contains information about manufacturers,
souvenir shops, and artisans including their contact information. In addition, they advertise
exhibitions and events in which their members can participate, both within and outside of
Jordan. Overall, the association is not providing significant support to their members in
production or marketing, and it has no lobbying power.
On the other hand, JHPA was established in 2005 under the Ministry of Culture Law
Number 33 of 1966 for Societies and Social Entities. It is a voluntary, nonprofit entity.
Membership in this association is restricted to handicraft business owners who have a
formal workshop or employees in a formal handicraft business. Those who do not have
formal handicraft businesses or are not employees in formal handicraft businesses can be
accepted as honorary members upon the Board's approval. Currently, it has 280 members
mostly from Amman, and the rest from Madaba, Irbid and Jerash. Members make
handicrafts in the areas of pottery and ceramics, rugs, olive wood products, daggers and
swords, and straw and reed products. The association is in its early stage of development
and is marginally functioning with external donor support. It provides a number of services
to its members, including help in marketing through pushing official entities to purchase
giveaways from producers and through participating in national, regional and international
exhibitions, as well as providing training courses in handicrafts and nomination of its
members to attend international training courses.
In addition to the Ministries and above associations, NGOs have played a major role in
developing and reviving crafts in Jordan as part of social and economic development in rural
areas by initiating income-generating projects. Their production operation is not based on
                                      Aqaba Community and Economic Development (ACED) Program –7
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
a business model, but rather on securing jobs for the beneficiaries and increasing their
salaries or wages to improve their living standards. In essence they are playing two roles.
The first is to help generate income and employment, and the second is to act as
entrepreneurs – the latter in which NGOs have virtually no expertise. This has resulted in
programs that continue to rely on donor financing and funding periods, programs that are
not run as businesses but charities, and products that do not reflect market needs and
preferences.
The major players in handicraft development in Jordan have been the following:
1. Royal Society for the Conservation of Nature
The Royal Society for the Conservation of Nature (RSCN) is an NGO whose mandate is
conserve wildlife and natural habitats while at the same time integrating conservation with
economic development. It has done this successfully through an integrated community-
based plan, development of quality products targeted to specific markets, branding of their
products, and use of an overall business approach.
Participants in RSCN initiatives have successfully marketed and sold handcrafted silver
jewelry, organic jams and fruit leathers, soaps, painted ostrich eggs, sandblasted frames,
environmental board games, and goat leather nature boxes. All of these initiatives are tied
to a strong promotional concept, which uses the “reserve address" and the conservation
philosophy as the main selling points.
2. Noor Al Hussein Foundation
The Noor al Hussein Foundation (NHF) is an NGO that works on a variety of different
programs, one of which has been handicraft development. It started the Jordan Design and
Trade Center to promote crafts. In the ‘80s and ‘90s, the Center had successes in product
development and design, but experienced problems finding skilled designers to continue
product development. This, coupled with funding issues, forced it to close. NHF is
represented in Aqaba through a small workshop.
3. Jordan River Foundation
The Jordan River Foundation (JRF) was established in 1995 as an NGO to initiate socio-
economic projects for women and to provide employment opportunities by developing
their knowledge and skills in handicraft production and entrepreneurship. It maintains a
showroom on Rainbow Street in Amman and is easily accessed by tourist. This facility is
stocked with some interesting quality products, but they are expensive compared to other
similar products made in other countries.
4. Jordan Hashemite Fund for Development
The Jordan Hashemite Fund for Development (JOHUD) has a network of more than 50
Community Development Centers that are providing a mixture of services to
entrepreneurs in design, business training, and credit access. It is represented in Aqaba by
the Princess Basma Community Center.




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                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 In addition to the above, a few private sector companies in Jordan produce handicraft
ceramics, glassware and embroidery. Overall, prices tend to be high due to casual and low
volume production, poor management and lack of proper costing skills. Throughout Jordan,
regardless of their area of craftsmanship, artisans tend to produce the same products, with
the same designs and are not encouraged by clients or others to produce unique
handcrafted items. There has been little effort to associate products with specific regions,
producers, or cultural heritage. This has resulted in products that lack a story, a history, or
a unique association. This is not because these stories do not exist, but because products
have not been marketed in this manner. The few exceptions to this overall trend are the
sand bottles made in Petra and Aqaba, the mosaic tiles made in Madaba, many of the
products made by the JRF, the NHF, JOHUD and the RSCN’s simple, yet elegant line of
jewelry and handcrafts soaps, jams and herbs found at the Dana Nature Reserve.


              b. Overview Of Handicrafts In Aqaba
The tourism sector is especially important to the economy of Aqaba, as large investments
are planned and being made to develop Aqaba as a major tourist destination in the Middle
East. Forecasts made by the EU expect that visitors coming into Jordan will increase from
270,000 in 2002 to 544,000 in 2010 experiencing an annual growth rate of 8.7%. Despite
challenges to the Aqaba market, the forecasted growth rate in Aqaba is expected to be
higher than that for the country as a whole.4 An estimated 300,000 people (both Jordanians
and internationals) currently visit the city annually, and this is planned to increase to over
1/2 million people by 20105. This influx of visitors has the potential to translate into income
generated over the long-term for local populations.
While tourism in Aqaba continues to grow and attract investment, handicrafts as a sub-
sector of tourism remain relatively underdeveloped. Handicrafts are available from
souvenir stores, hotel boutiques, traditional market places, small shops, and informal street
vendors. However, what little there is actually made in Aqaba has a hard time making its
way into stores. Storeowners find the handmade products too costly, of inconsistent
quality and unable to compete with the sales from other items. Therefore, most souvenir
shops will not put locally-made products in their stores.
Moreover, store owners do not display items in such a way that reveal the individuality of
the handicrafts, but display them bunched together – imports, products from various
regions of Jordan, and those found locally. Displaying in this way diminishes the perceived
value of the handicrafts themselves, leaving little room for branding or product
differentiation. Storeowners and their hired help have minimal knowledge at best about the
items they are now selling, nor really understand what a tourist wants in a product. Via
informal interviews, tourists stated that it was hard to find interesting handicrafts and that
there was no central place to buy them. Many stated that they had to search for stores
listed on the tourist map, and that tour guides did not include these places in their tours.6
In addition Aqaba is an economic free zone, wherein imported products from places like
Egypt, India, Pakistan, and China, are exempt from custom duties. This translates into there
being an abundance of cheap imported products in the souvenir stores, confusion amongst



4 Tourism Marketing Strategy for Aqaba 2005-2010, European Union
5 Tourism Marketing Strategy for Aqaba 2005-2010 ASEZA, 2005
6 Informal interviews conducted by consultant Carol Tyroler over the course of 8 weeks.
                                               Aqaba Community and Economic Development (ACED) Program –9
                                                 Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
tourists as to what is really from Aqaba, and price competition for real handcrafted items
from Aqaba. A good example of this are cheap shell bracelets and necklaces from China
that are sold as “from Aqaba” which sell for pennies compared to handmade jewelry from
a local producer that cost more. Inexpensive shawls and dresses from India are found
everywhere and detract from potential purchases of locally-made traditional Jordanian
dresses and scarves.
A few of the shops such as the Moevenpick Hotel, InterContinental Hotel, and the Noor
Al Hussein shop sell products made in Jordan with some locally-produced in Aqaba. For
example, The Intercontinental Gift Shop does some local sourcing of products from Aqaba
producers who previously worked with the Noor Al Hussein’s Aqaba Women’s Center.
The owner of the store gives them the materials and tells them what to make. The designs
and items are what they used to make (small bags, purses, eyeglass cases, and cell phone
holders), and the overall quality is good. Most of the souvenir stores in Aqaba, however,
sell a variety of products from Jordan, few if any from Aqaba (mainly sand bottle art), and
many imported goods.



                    i. OrganizationsWorking in Crafts
There are a handful of organizations, community-based and otherwise, as well as individuals
that are producing handicrafts in Aqaba for local and tourist markets. The personnel
managing the product development and design lack expertise in these areas and thus the
products that are produced reflect this deficiency. There are over a dozen past handicraft
projects and approximately six major players in terms of handicraft development currently
in Aqaba. Some of the more notable ones are discussed following.
The Jordan National Forum for Women produced palm products, mostly baskets, for local
markets. These were useful baskets, but the organization did not have significant success.
These activities are not currently functioning.
The Aqaba Women’s Association has a variety of handicrafts that it produces with no
target market in mind. Overall their products are low quality and sell to targeted specific
markets. It is selling to some venues in Amman; however, its success is minimal and
activities are dependant on external funding.
The Noor Al-Hussein Foundation has been an active player in handicraft development over
the past 10 years, developing some interesting, quality products. It has not, however,
invested in continued design and product development, and so it is making the same
products it did 10 years ago. They produce some new products not seen in Jordan, such as
tie-dyed clothes and wall-hangings depicting local scenes.
The Jordan Society for Sustainable Development, in corporation with Aqaba Coastal
Women’s Association and Al-Rahma Association, which is a recent addition to the sector
in Aqaba, had the most unique and high quality products discovered during this consultancy
for Aqaba. It is working with a local designer, Doris Ghneim, who is quite skilled in product
development and design and who is a trainer. They are producing unique handcrafted
boxes, bags, ostrich lamps, leather candleholders, and handmade paper items. However are
“running on a shoestring budget” and it is reported that they only have funds for the next
few months, at the time of the research.


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                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
The Princess Basma Community Center holds quarterly local bazaars, aimed at local
buyers, whereby producers and producer groups are able to market and sell their goods.
The center is a part of the operation of the JOHUD; however, it operates on a shoestring
budget with no target market identified. Some of the products are of good quality for local
markets and could be upgraded for tourist markets.
Al-Thagher works with the disabled to produce beaded jewelry. The designs are mainly the
designs of Felasteen Awad, a local consultant based in Amman. She trained the girls on the
production techniques and designed interesting products. Currently some of the new
designs are copied from what is available in the market or viewable from the internet. The
production reflects the efforts still being at the training stage, under the supervision of two
of the center supervisors and two volunteers, who help ensure that the products are done
correctly. While some of the products and designs are nice, there are problems with
quality control and consistency, as well as lack of business savvy. Like the other NGOs, the
people running the operation do not have business training and therefore are treating
activities as a charity operation.
The above organizations and their associated projects are functioning at margin levels, at
best. There are also a handful of individual producers working in areas such as wood,
crochet, embroidery and sewing that sell in local bazaars or to individual clients, but are
not affiliated with any particular organization, and are not fully supporting themselves or
families the what they generate from sales. A full description of the team’s notes on the
organizations that were visited is found in Annex 2.
Overall production capacity is currently limited due to two issues: funding and retention.
Because all of the handicraft projects are running on a shoestring budget and without either
a medium or long-term plan (or often no short-term plan), there is no funding currently
available to expand production capacity. Retention of employees after even finding suitable
candidates is also an issue. While overwhelmingly the majority of handicraft producers are
women, many of whom have no other option for work, organizations said it was hard to
keep workers. The women got bored or found the work tedious and lost interest. The
average wage that the producers were getting from the JSSD ranged from 60-80 JD a
month. Whether this was also part of the retention issue is certainly a possibility.
To date, the private sector in Aqaba has not played a major role in handicraft production.
There are many small stores that sell handicrafts, but little effort has been made to source
products from local vendors, with the exception of a few retailers. This has resulted in the
Aqaba market flooded with products from all over Jordan (and international sources),
growing stagnation of product choices, and yet little incentive to purchase locally.


                     ii. Overall Failure of Past Initiatives
Past handicraft projects in Aqaba have faltered, been weak, and insufficiently targeted. This
is the case for several key reasons: 1) lack of clarity on target market; 2) stagnation of
products produced; 3) lack of vision by the associated organization in regarding a
sustainable strategy for the project; 4) lack of business capacity; 5) lack of a sufficient level
of start-up funding to see projects through to self-sustaining levels; 6) insufficient
coordination at vertical and horizontal levels; 7) inability to be creative and be innovative in
product development; 8) competition from other handicrafts in Jordan as well as those
being imported; 9) no prior treatment of handicraft as an important sub-sector of the
growing tourism industry in Aqaba; 10) treatment of craft projects as charity and not as
business ventures; and 11) lack of critical thinking and design ability among producers.
                                        Aqaba Community and Economic Development (ACED) Program –11
                                           Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
1. Lack of clarity on target market
Overwhelmingly, craft projects have developed products without adequate planning vis-
à-vis for the target customers. Not only do they not know what their target market is,
they lack information on the tastes and preferences of their target customer. With few
exceptions, products have been made, based solely on local aesthetics, with the hope
that they will sell.
2. Stagnation of products produced
While a few projects have had designers help them in product development, there is
no investment in continuation of design efforts or investment in fostering artisans to be
creative themselves. Products, while not “mass” produced, are repeats, which are
produced without any creative spirit of the individual artisan. Designs that were
innovative 10 years ago are still showcased, but sales remain flat at best.
3. Lack of vision by the associated organization regarding a sustainable
   strategy for the project
Overwhelmingly, the organizations assisting producers and producer groups lack
medium to long-term strategies for success. This has translated into the following
scenarios:
        •   Products being produced, but not sold, or sold at very low prices
        •   Lack of money to hire qualified designers
        •   No funds allocated to marketing or business planning
        •   The project runs out of money, project ends, products are left to collect
            dust
4. Lack of business capacity
Neither the associated agencies that are sponsoring the handicraft projects nor the
producers themselves are savvy about business. Most critically this is seen in their lack
of ability to price products according to real costs plus a realistic profit margin. In a few
cases, such as with the JSSD, the designer is the one who costs and prices the
products. While she appears to be doing this correctly, there is no transfer of
knowledge to the producers. All of the business-level issues and knowledge (if they
have it) is kept within the higher management levels of the organization.
5. Lack of a sufficient level of start-up funding to see projects through to
   self-sustaining levels
None of the projects are sustainably functioning as businesses, and so funding received
is used for immediate needs. Products are not priced according to real costs or market
situation, but pulled out of the sky and therefore can not and do not support the
project. One project the JSDC at the time of the initial review in May 2008 had only
funds left for 3 more months. While its products are the most sellable, they had not
sold anything yet because they believe their workers are still in training. With one
month of funding left they conducted a exhibition in July and sold around 80% of their
products, as well as received some promises for future sales. They wanted to fully
train the workers to ensure consistent quality before marketing products. While this
makes sense on one hand, from a financial standpoint, it is unrealistic to plan a business
venture in three-month intervals. In a second project at the women’s center, funding
was utilized for training of women on palm weaving, but no products ever made it to
market on a continuous basis.
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                                     Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
6. Insufficient coordination at vertical and horizontal levels
There is virtually no coordination of efforts at either a vertical or horizontal level
amongst stakeholders. This has translated into handicraft projects that have failed, poor
investments, unmotivated workers, products sitting on shelves, and an overall inability
to take advantage of the money spent by the influx of tourists in Aqaba.
7. Inability to be creative and be innovative in product development
Most projects have relied on local managers and community leaders to do product
development. This has resulted in products that are not saleable to the tourist market
and only marginally saleable to the local markets. Producers are taught to produce, not
to innovate or be creative. This is true even in projects that have had outside designers
guide product development.
8. Competition from other handicrafts in Jordan as well as those being
   imported
The few products produced in Aqaba still have to compete in price, style, and
aesthetics, with those from other areas of Jordan, as well as imports found throughout
the souvenir stores in Aqaba. This raises the competition bar, yet has not resulted in
innovative or unique Aqaba products.
9. No prior treatment of handicraft as an important sub-sector of the
   growing tourism industry in Aqaba
There has been no treatment of the handicraft sector as an important sub-sector
within the growing tourism industry in Aqaba. Few, if any, vertical or horizontal
linkages have been made to build success for the entire industry, including the local
community. The handicraft sector needs to be looked at as an integral part of the
tourism industry.
10. Treatment of craft projects as charity and not as business ventures
Handicraft projects have and continue to be run as charity operations, not as
businesses. This is a critical issue that must be addressed if a robust, sustainable
handicraft industry encouraging tourism is desirable.
11. Lack of critical thinking and design skills among producers
Producers are not taught to be critical thinkers in product development or design, but
rather they do exactly as they are told, repeating steps and processes. While not
everyone is a designer, this limits innovation and product development potential.




                                 Aqaba Community and Economic Development (ACED) Program –13
                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
            c. Value Chain Participants
This section briefly explores the actors of the Aqaba handicraft sector from a value chain
perspective. Emphasis is placed on the relationships between participants, current
bottlenecks in information flows, and horizontal and vertical linkages that need to be
established or strengthened.
The value chain participants in Aqaba currently include input suppliers, independent
producers, producer groups, intermediary agents and traders, government officials, retailers
and wholesalers, tour operators, and tourist consumers. Contributing value chain problem
areas include the following:
    1. Producer Groups
        Producer groups and individual producers are marginalized, with very little if any
        interaction among them. There are no associations or cooperatives formed in
        Aqaba to share available information or reduce risks. The only producers
        association in Jordan is based in Amman, and it is newly formed and working out its
        own organizational issues.
    2. Inter-firm Relations (Vertical Linkages)
        Vertical linkages are currently non-existent with the exception of a few individual
        producers who are doing everything from making their own product lines, to
        designing products, to production, and to marginally marketing their products.
    3. Cooperative Relations (Horizontal Linkages)
        There is very little, if any, cooperation between NGOs and producer groups. The
        only linkages observed were the sporadic craft fairs in which several producers sold
        their wares at the same venue, such as, the quarterly Princess Basma Community
        Center in Aqaba Bazaars and the current products being produced with the JSSD
        and some local community-based organization (CBO) involvement.
    4. Individual artisans
        Individual artisans usually work alone to produce their products with no linkages to
        NGOs. These artisans were hard to identify in Aqaba, except for a wooden boat
        maker and several women who make children’s clothes and other crocheted and
        knitted items. Marketing is done on their own through networking, with some sales
        through local bazaars.
    5. Intermediary agent/traders and NGO/Agents
        The different intermediary agents function with very little funding and virtually no
        interaction. No shared lessons or aggregate grouping of risks, marketing, or other
        areas of cooperation were visible during this consultancy.




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                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
6. Support market
   Tourist Market – This is growing and strong. Consumers are looking for products
   to buy; however, they are buying primarily imported products.
   Local Market – There is a growing local market that is looking for home
   accessories. Primarily they buy cheap Chinese products, and other items that are
   less expensive than in Amman. There is potential to serve this client base.
7. Shipping services - non-existent
   At point of sale handicraft locations, there are no producer-based or retail outlet
   based shipping services though DHL, ARAMEX or postal office services. The
   customers must arrange for these separately, as retailers do not know cost of
   shipping, terms, or how to pack for international shipments.




                               Aqaba Community and Economic Development (ACED) Program –15
                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
III. Product Development and Production
     Diagnostic

           a. Overview
The selection of handicraft products found in Aqaba is limited, overall the quality is poor,
and products lack uniqueness. In spite of a fair number of handicraft projects over the
years, there is no single product or product line that represents “Aqaba.” Handicraft
products found in Aqaba range from items made for the local market (dried flower
arrangements, prepared foods, children’s clothes and uniforms, and traditional dresses) to
products aimed at potential tourist markets (bags, boxes, jewelry, dolls, etc.). Handicraft
products currently found in Aqaba are a mix of products from other regions of Jordan,
cheap Chinese, Egyptian, Pakistani and Indian imports, and some local items (sand bottle
art, corral from the Red Sea), and a few other miscellaneous products.


           b. Products Currently Produced in Aqaba
The following provides a snapshot of what handicrafts are currently produced in Aqaba and
the quality of these products. All of the products that were reviewed are listed below as
well as in Table 1 and photos of them are placed in an accompanying CD, titled “Core
Documents” which is available through the ACED Program.


Description of products and product lines
1. Textiles (embroidery and woven products)
Embroidery (both by hand and with the use of sewing machines) is produced by a number
of producers in Aqaba. Traditional embroidery is used as an adornment for traditional
clothes and has been used for new products such as pillowcases, wall hangings, tablecloths,
cushion covers, and more recently on bags and purses. Woven items are used in traditional
pieces – camel accessories, rugs and Bedouin cushion covers. The bulk of embroidered
and woven products varies in their quality and is mainly consumed locally. Wider
application of embroidery and woven methods could be introduced at minimal levels to
create new products and designs which could be attractive to the tourist consumer.
2. Baskets
Banana leaf and palm basket products have been tried with little success. The baskets were
of the wrong shapes and sizes, and the quality was inconsistent. Most of the baskets never
made it to the shops, but remain sitting on the shelves of the organizations that produced
them. There is ample opportunity to explore this area, as baskets have a cultural history in
Aqaba, the resources are available locally, and tourists like easy-to-carry items such as
these.




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                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
3. Jewelry
Jewelry found in Aqaba is a mixture of low quality beaded necklaces and bracelets made
from plastic, glass and seeds. In terms of the real handmade products, the overall quality is
inconsistent, exhibiting very poor finishing. These products have not found their way to the
souvenir shops. There is a group in Wadi Rum that is making simple, elegant silver and
copper jewelry designed by the RSCN with similar designs to those from Wild Jordan.
These are sold in the visitor’s center in Wadi Rum. What the souvenir shops do sell is
higher quality coral, other precious stones, and gold and imported jewelry from Indonesia,
China and other places. Souvenir shops produce the necklaces and bracelets, utilizing
precious stones and imitating Bedouin and other designs. With upgrades in design and
technical inputs, jewelry has the potential to be a leading area of craft production in Aqaba.
4. Wood
There is one woodworker in Aqaba that makes wooden boats, which he sells on the street
in front of his house, as well as via word-of-mouth. The overwhelming majority of his sales
are local sales. His woodworking skills are basic, but with some training in new techniques
and the aid of a designer – he has the potential to make almost anything. There is also a
plethora of carpenters whose skills could be upgraded and used to produce high quality
wood products, furniture, home and giftware.
5. Sand Bottle Art
Sand bottle art is made by a number of individual artisans who mostly sell on the street.
They are all producing the same product and little, if any, innovation is taking place. With a
change in bottles and design there is potential to create other more interesting products.
An annual design competition might be a great motivator.
6. Local Food
All kinds of local foods are made – but not sold to tourist markets. Frozen peas, dumplings,
cookies and breads are made and sold to local families with some success. Whether they
are making a profit is unclear. Their success here is minimal for the tourist markets. Jams
and syrups (dates) could be made and sold as small tourist items, but must be packaged
correctly and with proper hygiene.
7. Soaps
Soaps made from olive oil are being made by a group in Wadi Rum. The JSSD is planning on
making recycled soap from corn and Soya oil gathered from local restaurants and hotels.
An initial costing has been done, but no testing of the recipe or marketing has been done
to date. If soaps could be made, this represents a great potential for continued sales within
the local economy.
8. Clothing – sewing, crochets and knitted products
The Noor Al Hussein Foundation is making tie-dyed clothing, mostly geared for the beach.
They are using the same designs they used 10 years ago and basically have “given up” on
product development. Other organizations, such as the Princess Basma Community Center
in Aqaba are producing clothing geared towards local markets – traditional dresses,
uniforms for school, and baby items. The products are basic in terms of design, with color
schemes and patterns that fit more of a local style than those for a tourist market. Sizes
overall are inconsistent and again geared for local consumption.
                                     Aqaba Community and Economic Development (ACED) Program –17
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
9. Other Products
With the exception of the ostrich lamps, recycled boxes, leather lamps and candleholders,
(which still have not yet been officially marketed), none of the current products made in
Aqaba stand out as “unique.” Many of the better quality items that were designed and
minimally produced never went to market due to the supporting project running out of
funding, a typical status of previous initiatives evaluated during this consultancy.




                                   Aqaba Community and Economic Development (ACED) Program –18
                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Table 1: Matrix of Organizations, Products and Marketing Efforts

    Type of                                      Currently
                      Organization                                          Quality              Marketing
  Handicraft                                      Working
Beaded Jewelry      Al- Thagher               Yes                   Inconsistent            Non-existent
                    Burda Women’s             Yes                   Fair                    In Visitor Center
                    Cooperative
Silver Jewelry      Wadi Rum                  Yes                   Basic                   In Visitor Center
Embroidered         Princess Basma            Yes                   Poor                    Local Bazaars
pillowcases, bags   Community Center
and purses
                    Aqaba Women               Yes                   Poor                    Local Bazaars
                    Association
Sewing              Aqaba Women’s             Yes                   Good, but same          Have store, and
                    Association                                     designs as 10 years     weak marketing
                                                                    ago
Clothes             Noor Al-Hussein           Yes                   Good, but same          Have store, but
                                                                    designs                 not actively
                                                                                            marketing
                    Princess Basma            Yes                   Good, but little        Locally to
                    Community Center                                design change           companies
Crochet             Aqaba Women’s             Yes                   Good, but poor          Locally to
                    Association                                     designs and raw         housewives
                                                                    materials
Clothes, baby       Forum for Women           Yes                   Good, but poor          Locally to
items               Individual Producers                            designs and raw         housewives
                                                                    materials
Boxes, paper        Jordan Society for        Yes                   Good                    Starting to market
                    Sustainable
                    Development
Ostrich Lamps       Jordan Society for        Yes                   Good                    Starting to Market
                    Sustainable
                    Development
Baskets             Red Crescent              No but thinking       Poor                    No
                                              of restarting
                    Forum for Women                                 Poor                    Weak marketing
                    Individual Producers      Yes
                    Princess Basma                                  Poor                    No
                    Community Center          Yes
Leather lamps       Jordan Society for        Yes                   Good                    Starting to Market
and candle          Sustainable
holders             Development
Woven Camel         Burda Women’s             Yes                   Good                    Some
Accessories         Cooperative

Sand Bottle Art     Individual artisans,      Yes                   Good, yet not           Stores, On street
                    informal sector                                 unique

Dolls, Animals      Red Crescent              No                    Good                    None
Soap                Burda    Women’s          Yes                   Fair                    Some
                    Cooperative




                                           Aqaba Community and Economic Development (ACED) Program –19
                                              Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
              c. Core Strengths in Product Potential
In spite of Aqaba’s relatively nascent and previously unsuccessful handicraft history, there
are some core strengths from which the sector can draw. To start, skills exist in
embroidery, crochet, sewing, woodworking, jewelry, papermaking, sand bottle art, and
weaving. There are also a handful of painters, such as Abdullah Manzallawi, the town’s
librarian and self-taught historian, who are painting but not selling their work. Other skills
found in Aqaba include welding, carpentry, construction, and masonry. There is clearly a
tradition of working with one’s hands, which suggests that people here are trainable in
handicraft production. People are making handicrafts - they just aren’t making sellable
handicrafts. According to Abdullah Manzallawi,7Aqaba was once well-known for palm
baskets and other products, most of which were used for utilitarian purposes. These
included palm leaf baskets and brooms, fishing nets, musical instruments, and coral
necklaces. These skills and traditions can be drawn from to produce new products for
identified target markets.
The fact that Aqaba is in the process of being developed as a major tourism area is one of
its core competitive advantages in future development of its handicraft sector. In addition,
an approximate 11% of the population is unemployed and close to 30% of the population
range in age 20 to 398 - ages when most people are potentially active members of the
workforce. This is a large percentage of the local population that is in need of jobs and who
can be drawn upon by encouraging entrepreneurship as crafts workers, storeowners, tour
operators or managers within the sector. These opportunities translate into viable local
jobs and creation of potential income generation over the long-term.



              d. Results fromTourist Preference Survey
During May 8-10, 2008 a survey was conducted to assess the types of products that
tourists bought and were seeking to buy. A sample of 50 Jordanian tourists and 51 foreign
tourists were surveyed in the hotels, on the street, near the souk and in restaurants.
Results from the survey showed that the most popular foreign tourist items bought in
Aqaba were: jewelry (24.4%), sand souvenirs (12.2%), water pipes (also called “Hubbly
Bubbly”) (9.8%), scarves (4.9%), and camel toys (4.9%). Other products that foreign tourists
bought included ceramics, cups, head covers, lanterns, masks, scarves, bowls, Dead Sea
products, and some miscellaneous clothing items. The only item somewhat related to
Aqaba is the sand bottles.
These results show that products made in Aqaba are not reaching the stores, and that the
few “Aqaba products” that do exist are not being marketed to tourists. The foreign
tourists stated that they planned to buy other products, primarily jewelry (25%), scarves
(12.5%) and camel toys (8.3%). Other products mentioned included Dead Sea products,
carpets, silverware, water pipes, traditional scarves for men, Bedouin historical products,


7 Abdullah Manzallawi is an Aqaba-born Jordanian, currently working as a librarian, who has written several books
  on Aqaba history and heritage. One is called Heritage and Handicrafts in Aqaba.
8 Jordan Department of Statistics website
                                               Aqaba Community and Economic Development (ACED) Program –20
                                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
clothes, handbags, sand bottles and mosaic tiles. Many also mentioned that they might buy
olive oil, spices and Turkish coffee. Of the Jordanian tourists, only 22% of the sample
bought souvenirs from Aqaba of which 36.4% were sand bottles and 27.3% were personal
or household accessories. The other items local tourists bought were seashells, wooden
boats and home furnishing items.



              e. SWOT Analysis Product Development and Production
The handicraft sector in Aqaba is severely limited in terms of available products, currently
skilled producers, design ability and production capacity. The following documentation
outlines a detailed SWOT analysis of the sector in terms of product development and
production issues.


Strengths
    •    There is a cultural heritage and tradition to draw from. This can result in
         new products being developed, as well as the development of themed events for
         tourist such as an annual date festival, the opening of the historical fishing season, a
         za'tar and nut festival, etc. There are still some “old timers” who can help revitalize
         products that were once produced for utilitarian uses, and this can be used as a
         core asset for branding Aqabite products.
    •    Growth in Tourism in Aqaba. There are substantial investments being made in
         branding and building Aqaba as a leading tourist destination. Growth expectations
         are significant. According to the EU’s Tourism Strategy for Aqaba, an estimated
         300,000 people currently visit the city annually, and this is planned to increase to
         over 1/2 million people by 20109.
    •    There are established skill sets to draw from. Various handicraft areas
         already exist in embroidery, tailoring and sewing, wood working, basic jewelry
         (beading and simple silver smithing), welding, and weaving. These skills can be
         drawn from to produce new, marketable products for identified target markets.
    •    There is a potentially large pool of workers to draw from to raise
         production levels. Statistics show that 11% of the Aqaba population is
         unemployed and close to 30% of the population range in age from 20 to 3910 - ages
         when most people are active members of the workforce. With minimal
         expenditures required for training, barriers to entry are low for the handicraft
         sector.
    •    There is growing community interest in handicraft development. As local
         populations see a steady influx of tourists to Aqaba, they are eager to benefit from
         the revenue that they potentially bring. Handicrafts are one mechanism for
         capturing part of this increased revenue flow, and many locals are beginning to take
         notice.



9 Tourism Marketing Strategy for Aqaba 2005-2010 ASEZA, 2005
10 Jordan Department of Statistics Website
                                            Aqaba Community and Economic Development (ACED) Program –21
                                                Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
  •   Handicrafts overall have a low capital investment and high ratio of value
      addition. Handicrafts usually require utilization of readily available raw materials
      and simple machinery, ensuring low capital investment. Once sold, the added value
      in a handicraft item usually is high.


Weaknesses
  •   There are no unique exceptional skills found in Aqaba that have not
      been seen in other places. While skill-sets exist, without innovative design and
      product development and upgrades of skill levels, products will remain stagnant, flat
      and uninteresting, particularly for the tourist buyers.
  •   There are significant training needs. To date there have been inadequate
      production, vocational and business development training programs. All of the
      artisans and organizations need training in basic business skills, including product
      design, pricing and costing, production, marketing and management.
  •   Nothing to draw from in terms of lessons learned. There is no handicraft
      documentation or lessons learned in Aqaba to help pave the way for future
      initiatives. Prior product assessments have not been documented or shared with
      others. This means that all projects basically have to start from scratch.
  •   Products have not been demand-driven or focused on a target market.
      No effort has been made to think of “what does the customer want?” or
      moreover, “who are our clients?”
  •   Tour operators are not linked to handicrafts. Currently tourism operators
      are generally not connected to producer groups. Tour operators may take bus
      groups to the general Souk, to the castle or Noor Al-Hussein’s shop.
  •   Lack of design sense for target market. This was true of all producers unless
      there was some guidance from a designer. There is also an unawareness of
      international standards by many players in the market and a lack of specialization.
      Poor quality or lack of packaging further decreases the salability of the items that
      are produced.
  •   Fragmented, unstructured and individualized production systems.
      Projects that have or are supporting artisan initiatives overwhelmingly lack vision,
      are not run as businesses, lack adequate funding, have no business or marketing
      plan documented, and are running their projects on “shoestring” budgets resulting
      in low production levels
  •   Limited access to, and inadequate supply system of, raw materials. This
      translates into inconsistent products and untimely product production.
  •   No consistent input on new designs and product development. Without
      consistent input on new designs, designs will be copies or remain the same; thus
      leading to stagnation and a reduction in any potential repeat customer sales.



                                   Aqaba Community and Economic Development (ACED) Program –22
                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Opportunities
  •   There is a cultural heritage and tradition to draw from. There are some
      cultural heritage products that were made and used for utilitarian purposes in
      Aqaba that can be revitalized and made for the tourist market. Based on this and in
      coordination with good designer, there is a plethora of potential products that
      could be developed for the tourism industry.
  •   There is a large pool of skilled and unskilled labor that can be drawn
      from to produce products. With a high percentage of unemployed women
      reaching 25% and unemployed men at 12% according to the Department of
      Statistics Census of December 2007, this large pool could be effectively mobilized
      to produce handicrafts.
  •   Growth and investment in the tourism market in Aqaba presents
      potential to bring benefits back to community. Growth and investment in
      the tourism market in Aqaba presents huge growth and development potential
      which could bring benefits back to community over the long-term.
  •   Opportunities for vertical and horizontal collaboration. There are store
      owners who said that they would like to source locally. There are also producers,
      who, with proper training in business, could be successful entrepreneurs. There are
      roles for the private and public sectors to link together to create a more
      sustainable handicraft sector.
  •   Opportunities to get private sector involved in handicraft value chain.
      The private sector would benefit from sourcing unique products locally.
  •   Rising appreciation for handicrafts by consumers in the developed
      countries. As more tourists seek cultural destinations, they are also looking to
      take home with them a product that represents their experiences. This can
      translate into local growth in handicrafts. There are widespread “novelty seeking”
      and growing discretionary incomes at the disposal of consumers from developed
      countries.
  •   There is a growing trend in retail chains in major importing countries for
      suitable products and reliable suppliers. This is true of stores such as Pier
      One, Target, major department stores, etc. It speaks of consumers’ interest in
      “cultural” items.


Threats
  •   Competition of other handicraft products. There are many products
      (imported and other Jordanian-made) that Aqabite products will have to compete
      with. Any development must be aware of the global marketplace, as well as national
      and regional competition.
  •   Labor in Jordan is more costly than in other places, such as India, Syria, or
      China from which many tourist items are currently sourced.


                                  Aqaba Community and Economic Development (ACED) Program –23
                                     Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
•   Irregular and expensive inputs and inconsistent availability will not help
    Aqabite products compete over the medium to longer term.
•   No large pool of recognized Jordanian designers to draw from is resulting
    in talent from abroad staying abroad and not transferring skills to local designers.
•   Better quality products produced by competitors from Jordan, Asia,
    Latin American and other parts of the world. This includes better packaging,
    more competitively priced products and unique products from other areas.
•   Stricter international standards. Such standards are requiring the sourcing of
    more products that are “lead-free,” eco-friendly, fair trade, etc. Handicraft
    producers will need to adhere to these standards if they want to sell outside of
    Jordan.




                                 Aqaba Community and Economic Development (ACED) Program –24
                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Table 2: SWOT Matrix of Product Development and Production



   Strengths                                        Weaknesses
       •   Cultural heritage and tradition to            •    No unique skills
           draw from                                     •    Significant training needs
       •   Growth in tourism in Aqaba                    •    No lessons learned to draw from
       •   Established skill sets to draw from           •    No shared documents
       •   Potentially large pool of workers to          •    Products have not been demand driven
           draw from                                     •    Tourism operations not linked to
       •   Growing community interest in                      handicrafts
           handicraft development                        •    Lack of design sense for target market.
       •   Low capital investment and high ratio         •    Projects lack vision, not businesses
           of value addition                                  oriented, lack adequate funding, have no
                                                              business or marketing plan and are
                                                              running on a “shoestring” budget
                                                         •    Lack of awareness of international
                                                              standards by many players in the market
                                                         •    No access to capital
                                                         •    Lack of specialization
                                                         •    Inconsistent product standardization
                                                         •    Inadequate production, vocational and
                                                              business development training
                                                         •    No consistent input on new designs and
                                                              product development
   Opportunities                                    Threats
       •   Cultural heritage to draw from                •    Competition of other handicraft
       •   Large pool of skilled and unskilled                products
           labor                                         •    Labor in Jordan is more costly than in
       •   Plethora of potential products that                other places, such as India, Syria, or
           can be produced                                    China
       •    Growth and investment in tourism             •    Irregular and expensive inputs and
           market in Aqaba presents potential                 inconsistent availability
           to bring benefits back to community           •    Not a large pool of recognized Jordanian
       •   Opportunities for vertical and                     designers to draw from
           horizontal collaboration                      •    Better quality products produced by
       •   Opportunities to get private sector                competitors from Jordan, Asia, Latin
           involved                                           American and other parts of the world
       •   Rising appreciation for handicrafts by        •    Stricter international standards
           consumers in the developed
           countries
       •   Large discretionary income at
           disposal of consumer from developed
           countries
       •   Growing trend in retail chains in
           major importing countries are
           looking for suitable products and
           reliable suppliers




                                        Aqaba Community and Economic Development (ACED) Program –25
                                           Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
IV. Market Diagnostic

           a. Description of Market in Aqaba
There are almost 30 bazaars and souvenir shops in Aqaba. Most of them are scattered all
over the city. They range from the very basic Souk-type stores that have a mixture of
quality items, to the Moevenpick and InterContinental Hotels, and the Noor Al-Hussein
Store, all of which offer some of the best handicrafts one can find in Aqaba, as well as
represent handicrafts found throughout Jordan. Most of the products are sourced from
Jordan wholesalers, primarily from Al-Afghani, Zalloum, and Za’tary, or are being imported
directly by the souvenir shops.
In order to understand the current market situation from a retailer’s perspective, a survey
was conducted May 8-10, 2008. A total of 19 souvenir stores were visited in the Al-Awqaf
Building, the downtown area, the area opposite the Arab Bank and a few other locations
around Aqaba. Retailers were asked a series of questions, and their responses were noted
by the surveyors. The following represent the key findings:
   •   The majority of the retail businesses in Aqaba are shops that have been in business
       for over 10 years; only one was fairly new, having been in business for only three
       years.
   •   All the visited handicrafts retail shops reported that they mainly deal with imported
       souvenir products. Ten out of the 19 shops in the Aqaba handicrafts (souvenir)
       retail market reported that they mainly source their imported products from
       Amman, as well as direct imports from other countries - mainly China and India
       and, to lesser extent, Syria, Egypt and Turkey.
   •   Eight retail souvenir shops in Aqaba source their products only from Amman
       wholesalers without any direct imports, while only one souvenir shop relies solely
       on the direct imports of their goods from Turkey, China and India.
   •   Al-Afghani, an importer and wholesaler based in Amman, is the major supplier of
       imported goods for the Aqaba stores, followed by Khan Al Khalili, Zaloum, Za’tary
       and Zoghoul. Some products are being sourced through peddlers who mainly sell
       embroidery products made by women in homes.
   •   Only 30% of the surveyed shops reported buying locally-produced items, including
       rugs, musical instruments, accessories, embroidery, sand bottles, and silver. Noor
       Al-Hussein Foundation was the only organization mentioned as a source for some
       products, while the other NGOs supposedly active in this sector in Aqaba were
       not mentioned.
   •   Although some of the products were sourced from local suppliers, the retailers
       highlighted the following as weaknesses in the handicrafts sector in Aqaba:
           o Aqaba is not known as being a producer of handicrafts products (89.5% of
             respondents).
           o Inconsistent supply (10.5% of respondents).
           o Prices of the available handicrafts are high, which limits their retail sales
             (10.5% of respondents).

                                    Aqaba Community and Economic Development (ACED) Program –26
                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
                            o No trust in Aqaba produced products (5.3% of respondents).
             •   As for the best-selling items from the point of view of retailers, Dead Sea products
                 were ranked first, followed by embroidery, sand bottles and silver products as
                 shown in the following chart.


Figure 1 : Distribution of products according to number of times identified by retailers as
best selling product


             6


             5


             4
 Frequency




             3


             2


             1


             0
                                                                    Hand Made




                                                                                                 Traditional
                                                                                Indian Type
                               Embroidary



                                            Sand Bottles




                                                                                                                                                Jewelry



                                                                                                                                                          Mosaic
                 Dead Sea




                                                                                                 Jordanian
                                                           Silver




                                                                                                               T-Shirts




                                                                                                                          Products

                                                                                                                                     Greeting




                                                                                                                                                                   Wooden
                                                                                                 Products




                                                                                                                          Copper
                 Products




                                                                                                                           Islamic




                                                                                                                                                                    Boxes
                                                                     Products




                                                                                                                                      Cards
                                                                                  Clothes




                                                                                              Product Type


             Source: Souvenir Shops Survey



             •   According to retailers, most of the customers to the souvenir shops are Western
                 European tourists coming to Aqaba. Arab tourists, as well as Jordanians coming to
                 Aqaba from other geographical regions, represent a marginal share of the market at
                 just fewer than 8% and just fewer than 5%, respectively.




                                                                            Aqaba Community and Economic Development (ACED) Program –27
                                                                               Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Figure 2: Distribution of Customers of souvenir shops according to nationality



                           Others, 23.1%



               Aqaba Citizens, 2.1%                                  Western Europe,
                  Jordanians, 4.9%                                      53.3%

                           Arabs, 7.9%

                                 USA, 8.7%




                    Source: Souvenir Shops Survey

   •   As for what the tourists are seeking, about 65% of the retailers agreed that tourists
       are looking for traditionally handmade, made-in-Jordan products. This indicates a
       high potential for the development of a traditional handmade crafts market. Some
       84% of the retailers said they believe tourists would prefer to buy products made in
       Aqaba.
   •   The main determinants that might persuade retailers to buy products made in
       Aqaba in order of importance were quality, price and timely delivery.


           b. Market Size, Existing Opportunity and Determinants
   The survey revealed an inconsistency between markets and producers that can be
   addressed to enhance the current situation, the following outlines some of the results:
   •   From the survey, four of the shops disclosed their annual sale amounts, which
       averaged around US$21,000 annually. If these figures are spread and taken as the
       average for every shop in Aqaba, then the estimated overall souvenir market in
       Aqaba would be around US$600,000 annually.
   •   From our meetings with the handicrafts producers in Aqaba, we found that they
       are not selling a lot to the souvenirs shops, and the selling amount of the whole
       NGO sector does not reach US$10,000. This handicraft-selling amount represents
       less than 2% of the market opportunity that exists; the imported oriental products
       are occupying the remainder of the market (as will be discussed later).
   •   The main customers for the retail shops are tourists, where the tourism sector in
       Aqaba is considered one of the most important sectors alongside the real estate
       sector. This sector is economically important to Aqaba, as it forms one of the main
       tourist attractions in Jordan and it employs many of Aqaba’s resident workforce. If
       highly utilized, it could be one of the main long-term economic drivers for the city
       of Aqaba.
   •   The tourism market in Aqaba witnessed a remarkable growth during the past five
       years. The number of tourist arrivals increased by about 25% in 2006 above its level
                                         Aqaba Community and Economic Development (ACED) Program –28
                                            Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
         in the year 2003. However, note that only 4.9 % of souvenir shop sales are to
         Jordanians, while an overwhelming 53.3% of such sales were to Western
         Europeans.
         Table 3: Number of Tourist Arrivals to Aqaba, 2003- 2007 according to their
                                    nationality


                                                               Arrivals
            Nationality
                                  2004             2005               2006                  2007

           Jordan                224,291          221,453            287,137              241,574

           Europe                87,048           122,035            89,685                93,552

           Other
                                 45,865           77,483              46570                97,019
           Countries

           Grand Total          357,204          420,971            423,392               432,145
         Source: ASEZA Tourism Department

    •    Jordanians constitute the largest portion of Aqaba’s “tourists”; they made almost
         68% of all the arrivals to Aqaba in the year 2006, followed by European tourists
         who constituted about 21% of all the tourist arrivals to Aqaba as shown in the table
         above.
    •    Most of the arrivals to Aqaba are coming by land, while about (22.6%) are coming
         by air and (10.4%) are coming by cruise ships.11
    •    Based on the above, the average annual increase (almost 6.8%) is expected to be
         maintained through the coming 4 years, reaching about 526,000 tourists in the year
         2010. The number of foreign tourists is expected to reach about 232,000 by the
         year 2010, while the number of Jordanian tourists is expected to reach almost
         294,000.
    •    This rising influx of tourists will positively affect the demand on the handicrafts
         sector. Our survey revealed that 40% of the foreign tourists bought souvenirs from
         Aqaba, while 16% of the Jordanian tourists bought handicrafts from Aqaba. The
         average amount of money that the foreign and Jordanian tourist is putting as budget
         for the handicrafts is almost US$50 per family.


              c. Survey Methodology and Analysis
To assess Aqaba’s market opportunity and how to capture it, the different tastes of the
tourists coming to Aqaba and what is the main target market for the Aqaba handicrafts
sector, a survey targeting a sample of foreign and Jordanian tourists coming to Aqaba from
different regions was implemented. The following sections describe the survey
methodology, as well as detail the findings of the survey from respondent groups.




11 The source of figures is the ASEZA Tourism Department and it only includes the stated classifications.
                                             Aqaba Community and Economic Development (ACED) Program –29
                                                Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
   i.   Survey Methodology

To conduct the survey, a well-designed questionnaire was developed to capture the most
important characteristics of the market from the tourist point of view (See CD for Core
Documents, listed as “Questionnaire”). A team of three researchers was sent to Aqaba
during a 2-day weekend in May 8-10, 2008. The researchers targeted different tourist areas
inside Aqaba, including five-star hotels, the beach, downtown, tourist restaurants, etc. The
survey targeted a random sample of foreign tourists including Europeans, Americans, Far
Easterners and Arabs, including Jordanian tourists not living in Aqaba but coming to the city
as “tourists.” The survey collected the opinions of 51 foreign tourists and 50 Jordanian
tourists. An excel sheet was used to display the data of the two sample groups: a sheet for
each group was designed and the data inserted.
The following sections describe the output of the survey analysis where the findings from
each group are explained separately, since there are clear differences in the preferences of
each group in regard to handicrafts products.

   ii. Foreign Tourists Survey Analysis

In the survey sample, at least 17 nationalities were interviewed to get the most important
characteristics these nationalities are looking for in a made-in-Aqaba handicraft product. Of
further interest was what budget they are allocating for such products to buy from Aqaba.
The German, Holland, Russian and British nationalities were the major groups interviewed.
From the Arab countries only tourists from Qatar and Kuwait were represented in our
sample.
Table 4: Distribution of Tourists in the sample of the survey according to their nationality

                    Country                       Number                    % of Sample
         Germany                                       10                     19.6%
         Holland                                        9                     17.6%
         Russia                                         5                      9.8%
         British                                        4                      7.8%
         Bangladesh                                     3                      5.9%
         Serbia                                         3                      5.9%
         Australia                                      2                      3.9%
         Austria                                        2                      3.9%
         Hungary                                        2                      3.9%
         Qatar                                          2                      3.9%
         Others                                         9                     17.9%
         Total                                         51                     100%
         Others : Finland France, Ireland, Italy, Kuwait, Denmark, Ukraine and unspecified


    •   Most of the foreign tourists were in the age group below 50 years (80.4%), and all
        of them came to Aqaba for tourism. The sample has an almost equal percentage of
        male and female tourists. Some 88% of the sample surveyed said that they would
        stay in Aqaba for less than a week.
    •   About 40% of the tourists surveyed said that they bought souvenirs from Aqaba,
        while only an additional 18% said that they are planning to buy products from
        Aqaba. Most of the tourists did not have an exact budget for their purchases from
        Aqaba; though 11.8% set their budget at about US$100 per tourist.

                                         Aqaba Community and Economic Development (ACED) Program –30
                                            Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
   Table 5: Distribution of tourist's sample according to allocated budget for their
   purchases from Aqaba

                                                                    % of Jordanian
                       Budget for Handicraft (US$)               Tourists Interested in
                                                                  Buying Handicrafts
                                         0                               33.3%
                                        20                                9.8%
                                        25                                7.8%
                                        50                                5.9%
                                        70                                2.0%
                                        75                                2.0%
                                       100                               11.8%
                                       200                                3.9%
                                       300                                2.0%
                                       400                                2.0%
                                     Unlimited                           19.6%
                                      Total                             100.0%


   •    The main characteristics for the handicraft product that foreign tourists were
        looking for were tradition, made-in-Jordan and size.




Figure 3: Distribution of handicraft characteristics requested by tourists as per the survey



   40

   35

   30

   25

   20

   15

   10

    5

    0
        Tradition   Made in   Size       Price        Gifts   To be used Something Something Something    Others
                    Jordan                                        as     that is not Interesting Unique
                                                              Accessory    Fragile




   •    As for locally-produced food items that have the most potential to be sold to
        tourists, the traditional sweets were ranked first, followed by olive oil, spices and
        Turkish coffee.




                                                 Aqaba Community and Economic Development (ACED) Program –31
                                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Figure 4: Distribution of locally-produced food items according to foreign tourist’s
willingness to purchase


  45
  40
  35
  30
  25
  20
  15
  10
   5
   0
        Nuts     Turkish    Spices    Traditional     Dates      Cheese         Jam        Olive Oil
                 coffee                Sweets




   •   Finally, the survey of these tourists revealed that Aqaba souvenir shops are not
       displaying anything unique or directly representative of Aqaba, as only 3 out of the
       51 foreign tourists said that they found something unique to Aqaba in these shops.




  iii. Jordanian Tourists Survey Analysis
   •   As for the Jordanian tourists, most were youth and below 50 years of age, while
       only one tourist was above 50 years of age. Most were male (about 86%) and
       almost 92% of were in Aqaba for tourism, the remainder in Aqaba for work
       purposes. The majority of the sample had been in Aqaba for three days or less
       (92%).
   •   Only 16% of the Jordanian tourist sample bought souvenirs from Aqaba, but an
       additional 26% were planning to buy such products during their stay in the city.
   •   As for the most important characteristics the Jordanian tourist was looking for in
       handicrafts products, price came first, followed by tradition and the made-in-Aqaba
       or made-in-Jordan.




                                     Aqaba Community and Economic Development (ACED) Program –32
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Figure 5: Distribution of handicrafts characteristics favored by Jordanian tourists

       16
       14
       12
       10
       8
       6
       4
       2
       0
            Price   M ade in     Tradition To be used Something     Size   Something Something      Gifts for   Others
                    Jordan,                    as     that has an           Unique   that is not     friends,
                    M ade in               accessory interesting                       fragile       family,
                    Aqaba                                story                                     loved ones




   •    Most of the Jordanian tourists (50%) had a small budget for handicrafts, US$50 or
        less, while about 25% did not specify a budget for buying handicrafts.
   •    As for the most popular traditional food items that the Jordanian tourists would be
        willing to buy, nuts took first place, followed by Turkish coffee and spices.


Table 6: Distribution of Jordanian tourists in percentage according to their allocated
budget for handicrafts

                                                                    % of Jordanian Tourists
                Budget for Handicraft (US$)                          Interested in Buying
                                                                          Handicrafts
                                    8                                           5.0%
                                   15                                          10.0%
                                  22.5                                         15.0%
                                   30                                          10.0%
                                   40                                           5.0%
                                   50                                           5.0%
                                   70                                          15.0%
                                   150                                          5.0%
                                   200                                          5.0%
                               Unspecified                                     25.0%
                                 Total                                         100%




                                                 Aqaba Community and Economic Development (ACED) Program –33
                                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Figure 6: Distribution of traditional food items according to number of Jordanian tourists
willing to buy them




       45
       40
       35
       30
       25
       20
       15
       10
       5
       0
             Nuts    Turkish   Spices      Traditional   Dates      Cheese        Jam      Olive Oil
                     coffee                 Sweets




   It is obvious from the analysis of the foreign and Jordanian tourists’ preferences and
   willingness to buy certain handicrafts products from Aqaba that Jordanian and foreign
   tourists tastes differ strongly, and therefore the strategies to target each segment
   should be different, including the product types, prices, promotional and marketing
   activities, as well as how to target each of these groups.



            d. SWOT Analysis Regarding Handicrafts Marketing

The following SWOT analysis emphasizes the significant core marketing issues.
Strengths
   •   The market has a collection of products that appeal to tourists and
       locals: The sand bottle arts, the wooden boats and some embroidery and textile
       items were some of the products made in Aqaba and demanded by foreign and/or
       local tourists. These products are unique to Aqaba and if modifications to design
       are made and good marketing techniques are used, they will represent a winning
       segment in the handicrafts market.
   •   Some distribution channels in Petra, Aqaba and Dead Sea are exploited:
       Noor Al-Hussein Foundation was able to display its products in different outlets in
       the Dead Sea, Petra and some souvenir shops in the city of Aqaba. Other products,
       especially the embroidery, found their way to the shelves of the souvenir shops in
       the city as well.
   •   Direct selling to tourists exists: Noor Al-Hussein Foundation has its own
       handicrafts shop near Aqaba Castle. The shop displays handicrafts products that are
       made by the NGO and other producers working in Aqaba and elsewhere in Jordan.
       However, the shop is hard to find, as it is located out of the normal tourist walking
       area.

                                        Aqaba Community and Economic Development (ACED) Program –34
                                           Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
  •   Arrangements with tour operators is one way that is used to market
      handicrafts products to tourists: Noor Al-Hussein Foundation is the only
      producer who managed to have arrangements with tour operators/ guides to bring
      tourists to their shop near Aqaba Castle. Tour operators charge a fee on the
      overall sales of the shop to tourists they bring, and since the NGOs are not pricing
      their products properly, they consider these arrangements necessary though
      limiting to their profit margins.
Weaknesses
  •   No understanding of the market needs: The assortment of the handicrafts
      products available in Aqaba is not what the market is requesting: it consists of the
      products that were being produced many years ago, and all are similar to what is
      produced in other places in Jordan. None of the producers is aware of its targeted
      segment within the market or what this segment is looking for in the handicrafts
      products. Therefore, the collection is a mish mash with no production line theme
      or style.
  •   Production is not consistent either in quantity or in quality: Selling
      products to retailers and souvenir shops requires a sustained quantity and quality of
      production. Aqaba handicraft projects are all managed by NGOs that lack business
      know-how and thus the ability to maintain a sustainable flow of funding generated
      from the project resources. Therefore, most of the projects face problems with
      securing funds and with other obstacles that affect their production sustainability.
      As a result, their image in the market is one of a non-dependable source of varying-
      quality products.
  •   Products are not well designed or produced to satisfy a targeted
      segment of the market: The producers in Aqaba do not consider the needs of
      the different market segments (international tourists, tourists from other parts of
      Jordan, Aqabites, etc.) when they produce their products. All the products are
      similar, and no special characteristics are considered when produced for different
      segments.
  •   Marketing/sales efforts are absent: None of the producers interviewed in
      Aqaba has a brochure, website, leaflet, or any other promotional or marketing
      tools. The sales of products are being made either by the NGO management or
      production personnel without expertise in these areas. The only sales and
      promotion method that is popular in Aqaba is the arrangement of bazaars in which
      the NGOs display and sell their products directly to the public.
  •   No story telling/ branding: The handicraft products available in the market do
      not have a brand or story associated with them: they are just a copy of products
      made in other parts of Jordan. Sand bottle arts, although unique, started as a
      product of Wadi Rum. The only product that may be linked to the sea environment
      is the wooden boats produced by one of the artisans in Aqaba.
  •   The pricing is being set haphazardly: From all the projects sampled, none of
      them is sustainable. Sustainability is impossible due to their not knowing the real
      costs of their products and thus their being unable to price their products correctly
      with a satisfactory profit margin. If this sector is to be developed and sustained,
      costing and pricing of products should be a cornerstone of any development
      efforts.

                                   Aqaba Community and Economic Development (ACED) Program –35
                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Opportunities
  •   A booming tourism market: The Aqaba tourism market has experienced a
      tremendous increase during the last five years. This pattern of increase is expected
      to be maintained and further expanded as the tourism department in ASEZA notes
      that the number of rooms within the zone will increase by 20 fold during the
      coming ten years. This increase in activity with tourists coming to Aqaba with high
      spending power represents an opportunity for the handicraft sector to develop and
      capture a share from this sustainable and expanding market segment.
  •   Existence of a souvenir retail shop market: Aqaba currently has more than
      30 souvenir shops that sell an assortment of products which are currently mainly
      imported. ASEZA can issue regulations that force these shops to guarantee to
      display a minimum percentage (say 30%) of products from Aqaba-made handicrafts
      producers, which could form a huge market opportunity for Aqaba handicrafts
      producers.
  •   Availability of a corporate gifts market: ASEZA, ADC, the big hotels and
      companies in Aqaba keep a good portion of their budgets set aside for gifts and
      give-aways (initial budget for one entity is US$50,000) which represent a huge
      market for a well-established, local handicrafts sector.
  •   Handicrafts Incubator: The ACED Program is in the process of establishing an
      incubator with one of the NGOs in Aqaba that is active in the field of handicrafts.
      This could provide the sector with collective marketing activities that would help
      unleash the potential of developing marketable handicrafts products that respond
      to the market demand.
  •   The establishment of an old Souk: ASEZA’s Local Community Development
      Directorate is assessing the establishment of an old Souk that may provide a direct
      selling outlet for handicrafts products. Further, the Saraya Aqaba Project have
      designated an area called Souk Saraya Aqaba, which will include market retail
      outlets in a traditional design and may allocate areas for high quality handicraft
      products.
Threats
  •   Aqaba as a duty free zone: Aqaba is a duty free zone, which eases the import of
      products without custom duties, and thus affects the competitiveness of the locally-
      produced handicrafts products vis-à-vis oriental sourced products. Furthermore,
      Aqaba is considered a custom zone, which means custom duties must be paid on
      any product leaving Aqaba to other parts of Jordan, which complicates the export
      opportunities of Aqaba-produced handicrafts for wholesale export.
  •   Tour trip tourists: Many of the tourists coming to Aqaba are coming as part of a
      tour that includes Israel and Egypt. Since the products found in Aqaba are similar to
      those found in these two other countries, tourists will be less enthusiastic to buy
      Aqaba-made souvenir products.
  •   No central location to buy souvenir/ handmade products: Souvenir shops
      are scattered all over Aqaba without a central handicrafts Souk or area where the
      tourists can go to buy Aqaba-made products, which makes it more difficult to
      locate and buy these products.

                                   Aqaba Community and Economic Development (ACED) Program –36
                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Table 7: SWOT Marketing Matrix
    Strengths                                         Weaknesses
    • Some of the products have nice designs          • No understanding of the market needs
    • Distribution channels in Petra, Aqaba           • No sustained production quality or
        and the Dead Sea are exploited                   quantity, which limits his or her accessibility
    • One of the NGOs has its own shop                   to some selling channels
    • One of the NGOs has an agreement                • No segmentation of the target markets
        with tour operators to market its             • No marketing and/or sales efforts and plans
        products to tourists                          • No story telling or branding
                                                      • The pricing is set haphazardly
                                                      • Charity and NGO producers depend on
                                                         fund raising rather than a sustained profit
                                                         generating business
                                                      • No efforts whatsoever to export
    Opportunities                                     Threats
    • Tourism market is booming in Aqaba              • The status of Aqaba as a duty free zone
       and the number of tourists is increasing       • Major portion of the tourists coming to
    • Aqaba has almost 30 souvenir shops                 Aqaba are coming through a tour trip that
       that represent a potential market for             includes Israel and Egypt
       handicraft producers                           • Souvenir shops are scattered all over Aqaba
    • Huge corporate gifts market                        without a central handicrafts souk or area
    • The ACED Program will establish an                 where the tourists can go and buy Aqaba-
       incubator which may provide huge help             made products
       in marketing efforts of Aqaba
       handicrafts products
    • ASEZA Local Community
       Development Directorate is discussing
       possibility of establishing an old Souk
       that may provide a direct selling outlet
       for handicraft products
    • Saraya Aqaba is planning a special Souk




                                       Aqaba Community and Economic Development (ACED) Program –37
                                          Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
V. Organizational and Human Resource
    Diagnostic

The organizational and human resource diagnostic addresses: 1) the management of the
sector in Aqaba; 2) the types of producers available in Aqaba; 3) the capacity of the
producers in producing demand-driven handicrafts and managing the production
successfully; 4) an analysis of the supporting environment; 5) the key challenges facing the
sector's organizations and human capital; and 6) a SWOT analysis which is used as the basis
of the strategy and action plan.


           a. Management of the Sector in Aqaba
There is no management structure or main governing body that has taken the lead in
solidifying and unifying the sector. The obvious choice in Aqaba would be to establish a
governing body for the sector where ASEZA has a role with the private sector.
ASEZA was formally founded in 2001 as the statutory institution empowered with
regulatory, administrative, fiscal and economic responsibilities within the Aqaba Special
Economic Zone (ASEZ).
It is a financially and administratively autonomous institution responsible for the
management and regulation of the ASEZ. There are six ministerial – level commissioners,
responsible for major areas of regulatory or operational activity, who govern the ASEZ.


Vision Statement of the ASEZ
“The Aqaba Special Economic Zone is a world class Red Sea business hub and leisure
destination, enhancing the quality of life and prosperity of the community through
sustainable development, and is a driving force for the economic growth of Jordan.”


ASEZA’s Mission
   •   To improve the quality of life for all community members
   •   To create, regulate and sustain a globally competitive investor friendly environment
   •   To optimize the efficient utilization of entrusted resources in harmony with the
       ASEZ Master Plan to internationally recognized practices
   •   To affect a transparent and accountable corporate structure, governance and
       culture that synergizes the activities of the ASEZA team
The main quality objective of ASEZA is to consistently satisfy the specified needs and
expectations of ASEZA's customers in all its activities.
Within ASEZA, there are five main Commissions: the Investment Commission, the
Customs Commission, the Financial Commission, the Infrastructure Commission and the
Environment Commission. The most relevant to the handicraft sector is the Investment
                                    Aqaba Community and Economic Development (ACED) Program –38
                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Commission, currently having three sub-directorates: the Local Community Development
Directorate, the Tourism Directorate, and the Investment Directorate.
Community involvement is an integral part of the development process and of the creation
of strong, sustainable and cohesive communities. Focusing on the future of the ASEZ local
community through a human resource development perspective, the Local Community
Development Directorate in ASEZA is currently mandated to develop policies and
strategies for community development in the fields of education, health, low-income
housing and poverty alleviation. Furthermore, the directorate facilitates vocational training
of the workforce to meet market needs, and participates in planning youth programs.
Central to the mandate of the Local Community Development Directorate and part of its
objectives are: 1) supporting capacity development of small and medium sized enterprises
(SMEs); and 2) coordinating fundraising and donor activities with national and international
entities. Both objectives are highly relevant to community-based NGOs that produce
handicrafts in Aqaba.
It is understood that ASEZA is supporting an ACED Program review of ASEZA’s
community development interface. This review should encompass this handicrafts
document.


Aqaba Development Corporation (ADC)
Another institutional player in Aqaba is the Aqaba Development Corporation (ADC). The
ADC is a private sector company aimed at accelerating the development of the Aqaba
Special Economic Zone by maximizing public-private sector partnerships and investment.
The ADC owns strategic assets including the Aqaba ports, both air and sea, along with
strategic parcels of land, as well as the development and management rights in key sectors
of the ASEZ economy. By leveraging its existing assets, ADC will accelerate the
implementation of the ASEZ plans and projects.
ADC’s mission is to develop the ASEZ and implement the ASEZ Master Plan in a manner
that ensures integrated development.
ADC’s strategy is focused on the following:
   •   Building new infrastructure and required superstructures; expanding on existing
       ones
   •   Creating business enablers for ASEZ by investing in education and business enablers
   •   Packaging new investment projects in the transportation, tourism, and services
       sectors in partnership with local and international operators/ investors; maximizing
       attraction of private sector developers/operators
ADC's priority projects are based on analyzing, synthesizing, and prioritizing Aqaba's
development needs according to several key factors. Its main focus currently is on
infrastructural investments in the city. Yet, ADC has a community development program
which is mandated to implement developmental initiatives in the city as part of ADC's
Corporate Social Responsibility (CSR) initiative.
Handicraft Leadership Void
At the moment, neither ASEZA nor ADC list the handicraft sector in Aqaba clearly in their
mandate, and do not consider it an area of priority. At the macro-management level, the
                                     Aqaba Community and Economic Development (ACED) Program –39
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
sector is void of management or regulatory oversight by any specific entity and is not
considered as a priority to any substantive insitution. There are no resources dedicated to
manage the sector whatsoever, and it is not linked at all with tourism in an institutional
manner.
The institutional set up of the sector is weak and fragmented, and it is split among a
number of semi-government entities (royal non-profit organizations), NGOs, charity
societies and cooperatives which are not coordinating or cooperating in a structured
manner, and are duplicating their roles at the same time.
Tourism can be a vital and sustainable source of support for handicrafts producers, if the
producers were linked with tourism-related entities such as tour operators, hotels,
restaurants, and authorities responsible for historical places (or tourist/archeological
authorities). The diagnostic revealed that there are currently no institutionalized
cooperation links between handicraft producers and any governing body in Aqaba and that
there are no linkages or cooperation between handicraft and tourism sectors.


           b. Producers’ Capacity
The capacity of the producing organizations to sustainably exist in the market and compete
were diagnosed against five main organizational criteria: 1) the availability of a vision and
strategy; 2) the way in which such organizations handle the capital allocated for investment
in handicrafts production; 3) the aspiration of the organizations' management and
leadership towards handicrafts; 4) the availability of the organizational knowledge and skills
related to production; and 5) the availability of supporting management policies and
systems.


i. Vision and strategy
Organizations producing handicrafts lack vision and strategy: they don't have a clear vision
towards what they want to achieve, what their production potential is, or what their future
plans are. When they were asked what they want to achieve they responded with vague
statements such as: "We want to keep helping the women," or "We hope to sell more
next year.” Some of the organizations had a clear idea about what they wanted to achieve
this year and the following year, but had no substantial documentation to support their
direction.
One example is the Jordanian National Commission for Women, which wanted to produce
soap from used cooking oils. They have marginal information about costs, no recipe, and
no business or marketing plan. In the majority of cases, producers are donor-driven, and
their production is in response to funding. None of the producers interviewed were able
to provide expectations in figures or justifications based on concrete analysis of their
targeted market.


ii. Human resource capacities
Organizations producing handicrafts in Aqaba have two main levels of human resources: a)
technical personnel who serve as project managers, designers, trainers, and marketers; and
b) staff who produce the products, either at home or at a workshop.

                                     Aqaba Community and Economic Development (ACED) Program –40
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Management of the producing organizations was centralized in most organizations, but lack
solid business or marketing expertise. Decisions related to product quantities, prices, and
distribution was mainly the responsibility of the management alone. Several organizations
mentioned that they are adopting a participatory approach in choosing designs and in
identifying marketing activities such as bazaars and exhibitions. All of the organizations
interviewed stated that management personnel were multi-tasking and holding many
responsibilities, such as product design, marketing, pricing, managing the workers, training
employees, coaching new employees, supervising the production process, quality control,
product development and handling daily book-keeping and documentation. The number of
technical personnel at the producing organizations varied from 1 to 5 persons per
organization.


Table 8: Distribution of technical personnel and working labor in the main handicraft
producers in Aqaba

 Organization                     Technical Personnel                  Working labor

 Al Thagher                       2 supervisors – fulltime             12 disabled young girls
                                  2 assistants - volunteers

 Princess Basma Community         2 (the Center's manager and the      5 permanent workers
 Center                           sewing teacher)                      (handicrafts committee –
                                                                       volunteers)
                                                                       Un-known number of home-
                                                                       based women paid by piece

 Noor Al Hussein Foundation       1 (head of tailoring unit section)   3 fulltime home-based women
 – Women's Center in Aqaba                                             paid by piece

 Jordanian National Forum for     3 (the manager, the women and        40 home-based women
 Women                            child center manager, and the        (divorced or wives of
                                  food processing person)              prisoners), paid by piece

 Aqaba Women Society              2 (the manager and the sewing        5 home-based women, paid by
                                  teacher)                             piece after selling (the society
                                                                       charges 10% on each piece)

 Red crescent                     2 (the manager and the               6 fulltime working women
                                  embroidery and sewing                from the “old town” in Aqaba
                                  supervisor)

 Jordan Society for Sustainable   1 (the manager, the trainer)         6 fulltime working women
 Development (incorporation
 with Aqaba Coastal Women’s
 Association and Al-Rahma
 Association)



The working labor of handicrafts-producing organizations is mostly made up of women
working from home or at a workshop. Those who produce at home either receive
subsidized wages, or a portion of sales when their pieces are sold. Women work as
volunteers or full-time; volunteers were paid very humbly to cover their transportation
and one meal a day. Full-time workers on the other hand, have flexible working hours and
are paid less than the market price (average 70 JD/ month) for their efforts. It was noted as

                                          Aqaba Community and Economic Development (ACED) Program –41
                                             Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
well that skills transfer from the management and technical personnel to the working labor
is minor, and there were no systematic efforts evident in this area.
Very little incentives exist for producers to increase their skills or capacity. One exception
to this case was found in the JSSD, where the basic salary starts at 60 JD/month, and then
goes up to 80 JD/month, and can rise up to 100 JD/month based on performance and
workmanship. This process is based on the personal judgment of the supervisor, and the
supervisor’s own evaluation of labor performance, rather than on set criteria.


iii. Capital management
All organizations interviewed started their handicrafts production using project grants, and
they still depend on grants and other donor assistance for the most part. The exception to
this is the Noor Al Hussein Foundation. All of the organizations were unable to provide
documentation on how they calculated their revenues, costs or return on investment. In
addition, none of the organizations have a clear plan for increasing their capital.


iv. Organizational knowledge
The majority of organizations producing handicrafts had no internal organizational
knowledge management system. They historically jump from one product area to another,
without having a consistent production growth path, and thus were unable to accumulate
vertical learning experiences and proper documentation. In addition, none had a business
or marketing plan - preferring to deal with handicrafts production merely as a charitable
project.


v. Availability of supporting policies and systems
All of the handicrafts producing organizations lack clear policies and systems. These include
policies on pricing, marketing and quality control, and systems for selling, producing, and
assuring quality control. The majority of these organizations conduct informal quality
checks, and this procedure is usually carried out by the designer as in the case of the
Jordan Society for Sustainable Development and Noor Al Hussein Foundation, or a
committee such as in the case of the Princess Basma Community Center. Table 9 following
summarizes the organizational capacity of the handicraft producing organizations, based on
the information collected during the interviews.
The capacity of interviewed organizations was measured against the following:
       1- The availability and clarity of a vision and a strategy for the organization.
       2- The existence of a capital management procedure (how they manage their
          capital and plan for their cash flow).
           When an organization has no clear procedure for budgeting and capital
           investment, this competency was considered very weak. When the organization
           has some kind of a system but it is not documented, they were considered
           existing but in an informal way.
       3- HR capacities in place.

                                     Aqaba Community and Economic Development (ACED) Program –42
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
             This competency refers to the capability of the existing management and
             supervisory structure to manage the work well in an institutional manner, while
             not being soley based on just one or two persons.


         4- Organizational knowledge captured and shared.
             This competency refers to the market knowledge and the accumulated know-
             how available in the organization.
         5- Availability of supporting systems and policies for handicraft production and
            marketing, including pricing policies and key staff replacement policies,
            budgeting and accounting systems and documentation for sales systems.


Table 9: Organizational capacity of the handicraft producers interviewed


                                                                                                           Availability of
                    Vision      Capital
 Organization                                                                   Organizational               supporting
                      and       manag            HR capacities
                                                                                 knowledge                 systems/polici
                   strategy     ement
                                                                                                                 es
Al Thagher        None          None        Very weak                      None                           Very weak
Princess Basma    None          Very        Long experience in             Strong in textiles             Informal
Community                       vague       textiles but not in other                                     (undocumented)
Center                                      products
Noor Al Hussein   None          Weak        Professional for technical     Concrete organizational        Policies are
Foundation –                                personnel and skilled          knowledge but should be        undocumented
Women's                                     labor                          transferred so as not to       Systems are
Center in Aqaba                                                            be lost                        basic
Jordanian         None          None        Very weak                      Distracted, scattered          None
National Forum                                                             experiences, responsive
for Women                                                                  to donors, cannot be built
                                                                           on
Aqaba Women       None          None        Very weak                      Very humble                    Informal policy
Society                                                                                                   (work as
                                                                                                          retailers to
                                                                                                          artisans)
                                                                                                          Undocumented
                                                                                                          sales
Red Crescent      None          None        Not applicable as the          Unidentified                   Not applicable
Society                                     production is not in
                                            action
Jordan Society    It has a      Very        Centralized knowledge          None, the organization is      Basic
for Sustainable   vision, but   vague       and skills in the technical    new, and knowledge is          documentation
Development       it is a                   level (very skillful)          concentrated in two            Informal pricing
                  short                     Weak labor, follow             people - the manager and       policies
                  term one                  orders and steps (weak         the supervisor
                  No clear                  thinking skills)
                  strategy




                                          Aqaba Community and Economic Development (ACED) Program –43
                                             Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
             c. Enabling Environment
A supporting environment is necessary for producers to flourish and production to grow.
Aspects of a supportive environment for producers are listed and elaborated below.


 i. An Encouraging Legislative Environment
There are no protecting or encouraging pieces of legislation currently enforced in Aqaba to
support local products in favor of the imported products. The local community entities of
Aqaba producing handicrafts are of limited financial capability, and while ASEZA encourages
investment in the ASEZ, its laws do not readily apply to these historically smaller
producers and thus do not benefit them in the end.
National laws and regulations that govern local MSMEs are the same throughout Jordan,
and do not provide any competitive advantage to Aqaba entrepreneurs. Current laws are
not encouraging to home-based businesses due to professional licensing requirements,
which include locating the business in a commercial area. This affects the cost of running
the business on one hand, and encourages the increase of informal businesses and prevents
formal tracking on the other.


 ii.     Access to Finance12
Several micro-credit institutions and banks which could potentially provide capital to
handicraft producers were found operating in Aqaba and Amman as follows:
    1. Islamic Jordanian Bank,
    2. Industrial Development Bank,
       3. Development and Employment Bank UNRWA,
       4. Jordan Hashemite Fund,
       5. Amman – Cairo Bank,
       6. Tamweelcom, and
       7. The Middle East Micro-Credit Company.
There are several options for financing opportunities for small businesses in Aqaba.
However, conditions and requirements, such as salary transfer, represent hindrances,
especially because the majority of craft producers are not “employees.” In addition, the
upper ceiling of loans does not generally provide sufficient operating capital for start-ups in
the handicrafts industry to reach a secure stage allowing sustainability. Access to these
opportunities is also limited due to weak knowledge and awareness of what financing
options are available to support handicraft producers.




12 Financing entities providing less than 1000 JD were excluded from these comments; such as, the
 Jordanian National Forum for Women which provides loans of ceiling 500 JD to local women and
 UNRWA which provides loans ranging from 400 to 600 JD to Jordanian and Palestinian women running
 productive projects.
                                      Aqaba Community and Economic Development (ACED) Program –44
                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Table 10: List of the financing institutions and types of loans provided, loan ceilings, target
group, and the requirements or conditions to provide loans
                                              Interest
          Financial      Loan ceiling                                                                                      Payment
                                              rate for              Target group              Requirements
         Institution         JD                                                                                             period
                                                loans
                                                                                        o Personal assurances
                                                                                        o Business provides past
                                                                                          cash flow reports
        Cairo Amman             5000               17%                  MSME            o Business is more than 2          One year
    1       Bank                                                                          years old
                                                                                        o Business is officially
                                                                                          licensed
                         Up to 10,000       34%               -                         o Personal assurances          -
                                                                                        o Cash flow report
                         -                  6%                All                       o Loan is dedicated to         Up to 2 years
                         -                  6.5%              All                         purchasing products and      2-4 years
                         -                  7%                All                         equipment                    4- 5 years
        Islamic                                                                         o Salary transfer to bank
2
        Jordanian Bank                                                                    with assurances equals to
                                                                                          90% of loan amount for
                                                                                          employees and 10% for
                                                                                          trade businessmen

                                               1/3 of the
                                               revenues
        Islamic
                         100% of new           minus the
        Jordanian Bank
                         business cost       salary of the
        – Type 2 of                                                                     o Good reputation.
2                         or business         owner and             Business people                                        1- 5 years
        loans                                                                           o Personal assurances
                           expansion           2/3 of the
        (partnership
                         requirements       capital shares
        loans)
                                            until payment
                                            is made in full

                                               The bank
                                            funds 100% of
                                              the project
                                                                                        o Transfer 2 salary accounts
                                                 with a
         Industrial                                             Industrial and            to bank or mortgage real
                                              descending
    3   Development      Up to 10,000                         manufacturing micro         estate that is worth 175%    6 – 12 months
                                             interest rate
           Bank                                                 business loans            of loan base amount
                                            equal to 7.5%
                                                with no
                                              processing
                                                charges
                                                                                        o Jordanian nationality; for
                                                                                          Iraqis and Palestinians
                                                                                          additional procedures are
                                                                                          required
                                                                                        o Valid practicing license
                                                                                        o Registration certificate
                                             Bank funds                                 o Valid rental contract
        Development
                              More than      80% of the             Industrial and      o For financing equipment
            and
    4                        10, 000 and       business           manufacturing small     purchasing, applicant        6 – 12 months
        Employment
                             up to 25,000   Same interest           business loans        should present offers
           Bank
                                            rate as above                                 received
                                                                                        o If loan is intended to
                                                                                          expand the business, a
                                                                                          formal list of assets
                                                                                          indicating their value
                                                                                          should be presented




                                               Aqaba Community and Economic Development (ACED) Program –45
                                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
                                                                                                                  6 months no
                                                           Rural women
                                                                                                                    payments
                                                           (Loan title is
                      Up to 2000            6.5%                                o Life insurance                    Payments
                                                         Empowering Rural
                                                                                                                   distributed
                                                             Women)
                                                                                                                  over 6 years
       Development                                                              o Salary transfer                   Payments
 4         and       2000 - 15000           6.5%          Startup financing     o Obligation to pay back           distributed
cont   Employment                                                                 certificate                     over 6 years
          Bank                                                                  o Personal assurances
                                                           Developing the
                     2000 - 15000           7.5%                                o Mortgage real estate            Up to 6 years
                                                             business
                                                                                o Life insurance
                                            9%                                  o Salary transfer
                     Up to 50,000       descending         Entrepreneurs        o Mortgage real estate            Up to 6 years
                                         interest                               o Life insurance
                                      10% fixed or      Home-based micro        Letter of commitment
                     500 – 1500                                                                                5 – 30 months
                                      accumulative      businesses
                                                                                o Registration certificate
       Jordan
                     1500 - 7000      9% fixed rate     Startups                o Practicing certificate       5 – 30 months
5      Hashemite
                                                                                o Feasibility study
       Fund
                                                                                o Registration certificate
                                      10% fixed         Developing small
                     1500 - 5000                                                o Practicing certificate       5 – 30 months
                                      rate              businesses
                                                                                o Feasibility study
                     First time 300
                     – 800, second
                                                        Individual women's      o Personal bail                10 months
                     time 800 –
                                      18%               micro-businesses        o Salary certificate           12 months
                     1200
                                                        (Al Amal Loans)                                        15 months
                     Third time
                     1200 – 1500
                                                        Group/cooperative
6      Tamweelcom    200 – 600        -                 loans (group of         o Group bailing                15 months
                                                        women)
                                                        Progress loan
                                                        (progressing women-
                                                                                o Personal bails
                                                        owned businesses
                     1500 – 5000      -                                         o Salary certificate           4 – 16 months
                                                        (99% of these loans
                                                        are for home-based
                                                        businesses)
                                                        Personal loans to
                     Up to 5000                                                                                36 months
                                                        individuals
                     1500 - 2000                        Home-based loans                                          36 months
       The Middle                                                               o Bank checks from a trader
       East Micro-                                                              o Transfer salary to housing
7
       Credit                                           Commercial loans to       bank
       Company       2000 - 25000     12%               business owners         o For bank employees           36 months
                                                        practicing trade          guarantees are bank
                                                                                  checks and mortgage real
                                                                                  estate or cars
                                                                                o Land mortgage + salary
                                                        Agricultural projects
       Agriculture                                                                transfer                     5 years
                                                        or related to food
8      Credit        500 - 3000       5%                                        o Or land mortgage + court
                                                        production
       Corporation                                                                guarantee
                                                        (member of family)
       Social
                                      Only 40JD for     Productive house-                                      4 years
9      Development   500 - 4000                                                 o Court guarantee
                                      the expenses      hold
       Directorate
                                                        Women only
                                      10%                                       o Income sheet for
10     UNRWA         400 - 600                          Jordanians &                                           1 year
                                      approximately                               government employee
                                                        Palestinians




                                           Aqaba Community and Economic Development (ACED) Program –46
                                              Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
             d. Key Organizational Challenges
Overall, the handicrafts sector in Aqaba is not seen by the government or any ASEZ key
stakeholders as an area of priority. Following are the key challenges facing handicrafts
producers in two aspects: the organizational capacity of a producer and the enabling
environment for organizational growth.


1. Lack of information on the sector as a whole
There have been no studies previously addressing this sector in Aqaba. In July 2006 the
USAID-funded Jordan Tourism Development Project (Siyaha) conducted an overview and
an assessment of the handicrafts sector in Jordan to provide decision-makers with
recommended actions towards developing the sector. The study indicated that “according
to the Ministry of Social Development, there are about 250 societies registered,
representing several thousand persons (mainly women) with productive activities in
handicrafts.13” Most of these professional associations are involved in weaving and
embroidery. Some of them are involved in basketwork. There is no source of information
on the exact numbers of these individual crafts workers, but there are thousands spread
across the country.14
There is no one central place to find information about handicrafts in Jordan as no
databases of any kind exist. Information is scattered, segmented, and not organized. This
makes it very hard to identify which products are the most marketable, where to locate
the workshops or businesses, and with whom to cooperate and coordinate. In Aqaba
access to knowledge is highly dependent on personal networks.
Besides these individual crafts workers and social societies and cooperatives that are
spread within the rural areas, there are a number of NGOs that are registered under the
Ministry of Social Development. They initiated many crafts projects to alleviate poverty and
improve the standard of living of the deprived in the rural areas. According to Mr. Raed
Badri, the founder of the Jordan Handicrafts Association, there are an estimated 14,000
crafts workers in Jordan who are working and generating income from producing crafts.
This number includes all crafts workers who have registered individual companies, are
working in workshops that are not registered, in NGOs, and in societies, as well as
individual crafts workers.
2. Lack of coordination and cooperation
Producers interviewed were unaware of what others were producing, prices others were
seeking or alternative marketing channels. Cooperation between producers is limited to
participation in joint exhibitions. Cooperation between producers and retailers is virtually
non-existent. A few small shops, such as the one at the InterContinental Hotel in Aqaba,
source products directly from producers. Some organizations sell at souvenir shops in
limited amounts and others provide products on a consignment basis. Overall there is
minimal connection between the tourist market and the handicraft products made in
Aqaba.




13 Siyaha Handicraft Assessment
14 Ibid
                                    Aqaba Community and Economic Development (ACED) Program –47
                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
3. Contradicting role of the NGOs producing handicrafts
The biggest challenge the supporting agencies involved in handicrafts are facing is how to
treat the production and selling of handicrafts as a business and not as a charity venture.
The dilemma that current producers are facing mainly lies in the conflicting roles they are
playing: on the one hand supporting the local community through job creation, and yet not
looking at it as a sustainable enterprise. Current organizations are using charity-based
structures and policies to practice a business activity.
4. Weak organizational setup to match the requirements of income
   generating activities
The organizational setup of producers in Aqaba is dependent on volunteers and subsidized
wages for employees. This pattern does not allow organizations to maintain their
employees who are the core element of handicrafts production, nor does it allow them to
invest in their skills and capabilities through training, exposure to case studies or
investigating the possibility of other models.
5. Weak human resources competencies
Currently, availability of qualified technical people and expertise in the handicrafts sector is
a challenge. Salable designs and products are produced by those who were trained well and
mentored, or who are still being mentored by experts, either from developed countries or
from Amman.
6. Staffing issues
Most of the producers do not have the luxury of hiring full-time staff; so they tend to
arrange a no-risk relationship with their workers through home-based production, via
fulfilling payments after the selling of the products. Those who hire full-time workers
mentioned that it is difficult to find "good" workers. "Out of 30 interviewed candidates, only 5
have the basic skills required," said Doris, designer for the JSSD.
There is a scarcity of competent employees, and retention is difficult. The Noor Al Hussein
Foundation, the JSSD, and the Red Crescent Society are able to hire full-time employees.
Two out of these three, however, mentioned that they are suffering from a high turnover
rate, and that women in Aqaba tend to prefer a home-based employment even if they get
paid less.
        "It is hard to keep good female employees here, they are burdened with social and family
        responsibilities, and this is why I am flexible regarding working hours at the workshop.
        Some come late or leave early sometimes, and I accept that as long as they are doing
        their work. If I am strict in this, I will lose them." Rodica, Manager of the Women’s Center
        in Aqaba for the Noor Al Hussein Foundation.
7.   Weak access to and lack of sufficient financing
The weak access to financing is a significant weakness, as this does not encourage
entrepreneurship or risk-taking development of self-sustainable enterprises.
Additionally, available loans to support producers are small and typically inadequate to
ensure success of a well-established enterprise. The majority of NGOs that focus on
handicrafts production started their operations by relying on grants and funds from donors
                                       Aqaba Community and Economic Development (ACED) Program –48
                                          Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
such as USAID and the European Commission. Their progress in handicrafts production is
still dependent on the availability of funds and donations, and they are not close to self-
sufficiency.
Individual producers as well are dependent on external support: either financial support by
relying on loans and credit, or technical support from other institutions or programs.
Entities providing this external support assist individual producers by building their
technical skills through training, or by building their marketing capabilities through
providing them with access to markets or providing them with booths for exhibiting their
products. For organizations and individuals, it is clear that financial sustainability has not
been attained yet, and both are facing a lot of financial challenges, which jeopardizes their
sustainable existence in the market.



             e. SWOT Analysis Institutional Capacity


Table 11: SWOT Institutional Capacity matrix

Strengths                                       Weaknesses
 • Availability of some organizations that      • Sector is not a priority for official authorities
    can be local role models in some areas      • Sector is not organized or coordinated by any one
    (have longer and more successful              entity
    experience in producing handicrafts as an   • Lack of supporting/protecting legislation regarding
    income generating source for the              local handicrafts producers
    organization)                               • Insufficient financing
 • Availability of labor, especially home-      • Weak cooperation and networking between producing
    based                                         NGOs
 • ASEZA claims to be behind the                • None of the current organizations can be considered
    development of handicrafts and supports       as key producers of handicrafts (handicrafts
    this initiative                               production is one of their many programs)
 • Many groups (producers and NGOs) are         • Weakness in required skills for management, technical
    open to collaboration with others – they      personnel and working labor
    just need assistance in doing so            • Lack of organizational systems that support handicrafts
                                                  production such as proper quality control and
                                                  documentation
                                                • None of the organizations working in handicrafts
                                                  production are sustainable organizations
                                                • Skillful personnel such as designers and project
                                                  managers are mostly not local, they are either
                                                  foreigners or from Amman
                                                • There is no accumulated knowledge in the producing
                                                  organizations (either they keep producing the same
                                                  products without clear improvement plans, or they
                                                  keep switching from one product to another based on
                                                  type of funds they get)
                                                • Groups of artisans are segmented, with little or no
                                                  constructive coordination between groups either at
                                                  the managerial level or at the production level
                                                • Hard to retain workers who find some of the work
                                                  frustrating, tedious and without real tangible benefits,
                                                  since there is little marketing done to get their
                                                  products out to the market

                                         Aqaba Community and Economic Development (ACED) Program –49
                                            Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
                                                • Most groups who have been involved in handicrafts
                                                  lack business savvy and have no real sense of what the
                                                  market (the tourist industry) wants in a product, nor a
                                                  realistic pricing or profit margin scheme
                                                • All of the handicrafts projects have been or are
                                                  currently subsidized, as none have functioned
                                                  sustainability as a real financially viable business
                                                • Projects have not been vision – based, but project-
                                                  based, which needs to change if the handicrafts
                                                  industry is to thrive. There is a need to think of
                                                  handicraft production as a business, not a charity.
                                                • Insufficient capacity within local organizations to
                                                  properly and efficiently carry out planning and
                                                  regulatory functions, and insufficient skills among the
                                                  local population
Opportunities                                  Threats
 • Utilization of inherited skills can         • As Aqaba is vastly changing and becoming more
   maximize profit                               attractive to “outsiders,” the local community is
 • Availability of individual producers who      reacting by being more conservative and thus fewer
   are willing to consider their production      locals accept to work in the city
   as a main source of income (seeds for       • Limited availability of competent technical staff such as
   micro-business and entrepreneurship)          marketing people, designers and sales people
 • Opportunities for vertical and horizontal   • Sector is not currently attractive to the private sector
   collaboration
 • Opportunities to organize and regroup
   artisans together through cooperatives
   or associations, and provide coordination
   and technical support through a design
   training and exhibition center




                                        Aqaba Community and Economic Development (ACED) Program –50
                                           Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 VI. Sector Strategy

            a. Introduction
This strategy provides an overarching framework for guiding necessary action to promote
the growth of the handicrafts sector as a mechanism to reduce poverty, and create long-
lasting income generation for the Aqaba community. It promotes coordination among
stakeholders and focuses and encourages innovation, creativity, and horizontal and vertical
linkages to improve the sector’s performance. The strategy takes a market-oriented
approach incorporating the following:
    •   A vision for the sector’s future;
    •   An analysis of identified constraints;
    •   The design of target interventions to address priority constraints;
    •   The facilitation of product- and production-oriented interventions;
    •   The facilitation of market-oriented interventions;
    •   The design of institutional capacity interventions; and
    •   Suggestions for the next steps needed to be made.


        1. Vision and Overall Objective
The development of the handicrafts sector strategy is driven by the following strategic
objective and vision:
 “To build the entrepreneurial capacity of handicrafts producers and associated
organizations in order to capture the influx of money being spent by the tourism sector,
including visitors to Aqaba and sector stakeholders.”


        2. Strategy
The implementation of the strategy will be through two phases over a 4 - year period:
−   Phase one is a preparatory phase, which allows for relationship building, capacity
    building and overall development of the sector in terms of producers, production,
    markets and institutional needs. It is two years in duration.
−   Phase two will focus on strengthening what has been initiated during phase one,
    transferring the different initiatives to identified entities and upgrading systems to a
    more sustainable level. Phase two is a two-year program.
The strategy has been divided into three sections: product development and production,
marketing, and institutional development. An overall strategy for each section is described
in detail in the following sections. This is followed by a detailed action plan and cost analysis
for the entire strategy.


            b. Strategy for Product Development and Production
The strategy for product development and production takes a business-oriented approach,
                                      Aqaba Community and Economic Development (ACED) Program –51
                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
ensuring that products developed are market-driven, include associated marketing and
business plan, and take into account factors such as time-to-market requirement, product
cost, development cost, product reliability, and training and human resource needs.
The following product development core constraints have been identified, and the
solutions to these constraints form the basis of the product development strategy.
Core constraints:
   •   Inability of organizing institutions and individual producers to design quality
       products, successfully market them through viable channels, and sell products at a
       profit;
   •   Insufficient access to product design services and timely market information for
       new product development;
   •   Insufficient capacity of producers to be innovative and creative when producing
       their crafts;
   •   Products produced don’t reflect the cultural heritage of Aqaba, nor are the natural
       motifs, symbols and images of the area incorporated into the products;
   •   Products are priced without any real sense of cost structure or market
       competition, thus impacting their overall competitiveness;
   •   Sector as a whole is fragmented;
   •   Lack of capacity to identify and link with buyers in key market segments;
   •   Lack of access to regular, affordable, and consistent quality raw materials; and
   •   Insufficient access to production and product development financing.


1. Priority Product Analysis
Initial product areas were based on a diagnostic of identified skills of the producers
population, current areas of production, cultural heritage and availability of local resources.
Based on the criteria set, ten core areas were identified, but not ranked:
   •   Felt products
   •   Palm leaf products
   •   Ceramics
   •   Textiles
   •   Jewelry
   •   Wood products
   •   Eco-friendly products (glass, paper, tin, recycled products, etc.)
   •   Food
   •   Leather
   •   Sand bottle art
Identification of product areas was followed by an analysis of critical factors, a ranking of
these factors and a criteria-weighting exercise. A detailed explanation of the methodology
used and graphs showing the ranking and analysis are noted in Annex 4. The areas in order
of priority are shown in Table 12 and Figure 7.

                                      Aqaba Community and Economic Development (ACED) Program –52
                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Table 12: List of handicraft product areas according to their priority score in a descending
order (1 is highest priority, 9 is least priority)

                               Priority #                        Product/s
                                   1                                Textile
                                   1                            Sand bottles
                                   2                                 Food
                                   3                             Palm leaves
                                   4                        Eco-friendly products
                                   5                               Jewelry
                                   6                            Felt products
                                   7                              Ceramics
                                   8                          Wood products
                                   9                               Leather


Figure 7: Distribution of handicraft product areas according to their cumulative priority
scores




                      Felted products

                          Sand bottles

                               Leather
  Product Areas




                                 Food

                  Eco-friendly products

                       Wood products

                             Jewelery

                               Textile

                           Cermanics

                         Palm leaves

                                         0   5       10            15            20            25            30

                                                                 Scores




                          2.       Strategy Components
The product development strategy focuses on developing demand-driven products from
the prioritized list based on identified target market criteria. The strategy builds upon
already existing skills and cultural heritage found in Aqaba, coupled with inputs from new
designers, training in core business areas, horizontal and vertical linkages, ensuring access
to raw materials and the fostering of entrepreneurship. The strategy uses a business-
oriented model to identify handcraft items from Aqaba that will bring long-term benefits to
the individuals and communities in ASEZ.
It is important to point out that there is a difference between “handcrafted” products
(artisans who produce the same product in exactly the same way) and “unique” handicrafts
(artisans who use their own creativity to produce unique items). Each of these two areas
has different customer bases, clients with different preferences, and different distribution
channels. When targeting effective sales of products and identifying markets, both




                                                  Aqaba Community and Economic Development (ACED) Program –53
                                                     Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
customers and products need to be synergistic.15 This strategy aims to create opportunities
for both types of product development: handicrafts and handcrafted products. The
following are the main pillars of the product development and production strategy:


Pillar I : New Product Development and New Designs
    1. Invest in innovation and product development skills
New products and product lines need to be created that represent the “Aqaba
Experience.” Product development will take a market-driven approach based on current
analysis of what tourists and locals want, raw material availability, quality standards, unique
designs and other competitive and enabling factors, which will raise the standards and
image of products produced in Aqaba. This type of product development has proven to be
more successful than producing products and hoping the market will respond.
Products and product lines will be based on the prioritized product areas, followed by a
detailed feasibility study, and a business and marketing plan for each product line before a
determination of which product lines are to be prioritized for development. A feasibility
study will provide detailed information on the product specifications, costs, resources
needed, timeframe, markets, etc. – all of which are essential before any investment is made.
Expanding opportunities via combining skills and materials will call for artisans with wider
skill applicability and those that can cluster and work well with other artisans.
Product development must be an on-going initiative. No design or product will last forever.
Every product has a life cycle, meaning that products and product ideas cannot remain the
same forever. In order to continually remain competitive in the marketplace, it will be
essential that products and designs be continually explored in relationship to their targeted
market. This may mean altering, tweaking, expanding, subtracting from, adding to, and
changing product lines to include more market-oriented products. The most successful
businesses have used a mixture of different products at various stages in their product life
cycle to balance their businesses. This ensures that the more established and profitable
products will finance newer products.
    2. Hire qualified designers
Using the already identified product areas, qualified international and local designers should
be hired to design product lines and products that can be successfully sold in the identified
target markets. Experts in each product area will be brought on board to bring expertise in
design, new techniques and industry innovations throughout the life cycle of the program.
Ceramic artists should be brought on to design ceramic products, papermakers to design
paper products and so on. Hiring designers based on their area of expertise will bring
talent not only in new product lines, but could aid in the adoption of technological
innovations and best practices. International designers can be teamed with local designers
to mentor and guide the process were local expertise does not exist. This will help capture
and build the capacity, within Jordan generally and Aqaba specifically, rather than relying on
continued outside guidance.
    3. Build on Aqaba’s heritage, cultural designs and locally found resources
There are a number of products that once were produced in Aqaba for local utilitarian


15 IDB Handicraft Mapping Document, August 17, 2007.
                                           Aqaba Community and Economic Development (ACED) Program –54
                                               Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
uses. These include items made out of palm leaves (baskets, brooms), wood and sea corals,
and finished products such as musical instruments, fishing nets and mud bricks. A complete
list of products can be found on the following pages in Table 13. While new product areas
will be included in what is developed in Aqaba, product development will do best to build
on the cultural history of the area, to use locally found resources, and to incorporate local
motifs and designs into the products that are produced. This is also a key to gaining trust
amongst entrepreneurs and encouraging community involvement.
Two core product areas that have potential in Aqaba are palm leaf products and recycled
products. Even though these product areas did not rank among the highest in the ranking
exercise, it is believed that these have potential because of their availability and for the
palm’s cultural significance. The palm leaf baskets have culturally been used for all
household uses and could be made in a variety of sizes to hold dates, coffee, spices, soaps,
oils and lotions, or made larger to hold other items. Palm leaves can also be weaved into
mats and beach hats. The use of recycled material goes well with Aqaba’s “protected area”
status and adds to the branding of Aqaba as an eco-friendly tourist destination. Moreover,
the trend now is with making sustainable, green products that are eco-friendly. (See the
Core Documents CD for pictures of some recycled product lines in the document entitled
“recycled ideas”). However, before any investment is made and products are produced, a
detailed feasibility study must be done.
The following outlines suggested cultural motifs that may represent Aqaba. This is followed
by a table that outlines potential product areas and product lines.
Key Motifs:
   •   Camels, donkeys, horses
   •   Aqaba carriages
   •   Aqaba Castle
   •   The sea – fish, shells, boats, fishing, diving, corals, fishermen, sailing, windsurfing and
       other water sports
   •   Mountains
   •   Subtle color of landscape
   •   “Turn Sand into Gold” theme
   •   Desert colors
   •   Desert flora and fauna
   •   Traditional patterning used in embroidery
   •   Musical heritage products - such as different drums or the Semsemieh (local harp)
   4. Creation of design incentives
In order to foster innovation amongst producers and designers, there must be an incentive
to do so. One way is for products to become successful and popular in the market place,
but another is to stimulate competition amongst producers and designers through awards
and recognition. A local design competition can be implemented that rewards the best
design and product developed with financial or other recognition. This could be done
annually or biannually. Once established, this competition could expand to include all of
Jordan. A committee would need to be established that reviews products, sets criteria,
and designs a campaign to publicize the competition.
   5. Feasibility study
In Annex 3 there are illustrative examples of ten product lines representing ten different
businesses to provide a sense of their cost of the operation and potential revenue
                                      Aqaba Community and Economic Development (ACED) Program –55
                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
generation. These are meant to be illustrative examples, with various assumptions made,
and are not meant to take the place of a thorough feasibility study. It is recommended that
before any product development is done in any area or product line, a detailed feasibility
study and business and marketing plans should be completed.


Pillar II: Training and Learning Initiatives
   1. Business training
Producers will need training in a variety of areas to help them become successful
entrepreneurs. Training should focus on basic costing and pricing, product development,
marketing, packaging and presentation, and business management. These types of training
need to be done over time and repeated when entrepreneurs establish their businesses.
The training could first be run through the business incubator during years 1-2, followed by
the design and exhibition center taking the lead in years 3-4. Training should be
participatory in nature, ensuring that practical learning takes place and not purely
theoretical learning. There are various training modules available. One example is the
Crafts Center at CHF International’s Artisan Training Modules, which highlight key learning
areas, are experiential in nature, and focus on the essential lessons needed by
entrepreneurs. A training-of-trainer workshop for each module should be conducted for
designers and excelling handicraft workers in order to transfer the knowledge to new
entrants in the market.




                                    Aqaba Community and Economic Development (ACED) Program –56
                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Table 13: list of potential handicraft products for both international and local tourists

                                                                                           Potential Product
      Category            Potential Product Lines for International Tourists                 lines for Local
                                                                                                Tourists
1. Palm Products        Baskets of all sizes                                             Home furnishing line
                        Hats (beach)                                                     Furniture (local market)
                        Woven Mats – for the beach                                       Woven mats
                        Export – Christmas wreaths
2. Ceramics             Use local sand to produce ceramics – new line                    Utilitarian Line –plates,
                                                                                         cups, bowls, etc.
                        Sculpture – small animals, whistles, figures of people           Vases
                        Small houses depicting scenes of life in Aqaba                   Home furnishing line
                        Candle holders                                                   Candle holders
                        Small vases                                                      Small vases
                        Tiles from Aqaba

3. Textiles (Upgrading Rugs
    and New designs) Pillow cases                                                        Home furnishing line
                       Duvet covers
                       Linens
                       Napkins
                       Tablecloths
                       Bags and purses
                       Beach bags
4. Jewelry ( Upgrading Silver: necklaces, bracelets, earrings, picture frames
    and New designs) Beaded: necklaces, bracelets, earrings, picture frames              Same
                       Eco-line: necklaces, bracelets, earrings using green malekite
                       from Aqaba or green agate, which is for good health; sea
                       glass; date pits and other seeds

5. Heritage             Musical instruments                                              Home furnishing line
                        Traditional date baskets
                        Brooms

6. Sand Art             Change the bottles, tell the story with a good hang-tag,         New bottles used,
                        showcase unique drawings, have a designer competition            produced locally or
                        New bottles used, produced locally                               from recycled glass
7. Glass                Recycled and other                                               Home accessory line
8. Wood                 Boats (small), canoes, other sculptured items                    Furniture line
9. Eco-Friendly         Recycled products (glass, tin art, and recycled paper            Home furnishing line
    a. Green            products)
                        Beach wear – Recycled plastic bags

   b. Glass              Recycled glass – cups, dishes, bowls, etc
   c. Soap               Recycled soap (reprocessed oil)
10. Food: locally       Date molasses, nuts, spices, jams, honey, Turkish coffee,        Same, but in larger sizes
   produced             oregano (za'atar), herb oils, lotions for hotels                 and sold to hotels
11. Felted products     1. Bags, purses, coin purses, wall hangings                      Same, but in larger sizes
   from goat, sheep                                                                      and sold to hotels
   and camel wool       2. Dolls and animal figures
12. Leather             Wallets                                                       Furniture
13. Fair-Trade Line     Could be applied to any product area using a hang-tag or logo
                        to explain story of artisan, wages, etc.



                                          Aqaba Community and Economic Development (ACED) Program –57
                                             Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
   2. Study tours
Designers and producers should be invited on study tours of other craftspeople. As a start
they can visit those who are of similar expertise and can be within the region. These tours
can then be expanded to other countries and even trade shows, such as the New York Gift
Show or the Los Angeles Craft Show, so that producers/entrepreneurs can see what their
competition is like, refine technology used and receive training from peers. But as a start,
they could go on a local tour within Jordan by visiting Madaba, Amman (stores and
boutiques), Wadi Rum, Petra, Irbid, and other identified areas.


Pillar III: Horizontal and Vertical Linkages Created
Linkages, both horizontal and vertical, are practically nonexistent in the handicrafts sector.
Establishment of effective stakeholder coordination is critical for sector growth and
sustainability. Cooperation between entrepreneurs, programs, affiliate entities and most
importantly the private sector is crucial.
Forming a satellite producers association
Horizontally, producers need to be linked so that they can aggregate responsibilities, lessen
burdens by sharing in risk taking, and learn from each other. Strengthening the Jordanian
Producers Association based in Amman, rather than starting from scratch, is a suggested
first step in forming a branch in Aqaba. By strengthening the association in Amman,
producers in Aqaba can work with peers more advanced than they and apply core lessons
learned to their own production and product development. This serves as a venue for
linking producers together as entrepreneurs, rather than linkages solely based on
associated projects. Horizontal cooperation will also reduce transaction costs and mitigate
risks. Other horizontal linkages could be made between NGOs, retailers, designers and so
on.
Vertical linkages are important as well. Creating entrepreneurs that make products and sell
them directly to clients will help in creating strong businesses that rely less and less on
subsidized services, donors or NGO involvement. By linking the private sector into the
overall production and product development process, there is greater hope that the
products made will sell in the market. Linking designers and producers more effectively
with buyers will go a long way in addressing the fragmentation of the sector and in building
on potential market agreements. By identifying strong and diverse local partners the
project has more potential to create more long-term, effective change. Hotel chains, retail
stores, and developers need to be part of the stakeholder mix, and both sides (handicrafts
producers and the private sector) need to be aware of needs of the growing Aqaba tourist
sector. While tourism is not the only venue for handicrafts, the handicrafts sector is a sub-
sector of tourism.
Access to raw materials
Currently there is inconsistent availability of quality raw materials, and producers are
unable to finance material costs. Lack of access to regular, affordable, and consistent quality
raw materials can be resolved in two ways:
   a) Linking producers with buyers who provide them with the necessary raw materials,
      and
   b) Creating a raw materials bank.

                                      Aqaba Community and Economic Development (ACED) Program –58
                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
   a. Linking Producers with materials though a buyers' consortium
   Linking producers with buyers who provide them with the necessary raw materials to
   make their products will help to ensure quality, consistency and timely delivery of
   products. This can be done in years 1-2 through a buyers' consortium and incubator,
   followed in years 3-4 with the design training and exhibition center involvement. This
   will also enable producers to move forward with their production, even if they cannot
   afford to buy the raw materials in their initial stages of entrepreneurship.


   b. Establish a raw materials bank
   A raw materials bank will lessen the possibility of unavailability of resources during low
   seasons, will increase affordability and consistency in the supplying of materials, and will
   foster entrepreneurship. Because agricultural raw materials are highly seasonal and
   irregular, a raw materials bank offers the advantages of being able to buy the materials
   in advance and store them for use during the low season. These materials can be
   housed in, and administered through, the design (training) and exhibition center. Raw
   materials banks have been used in many places around the world to help producers
   have consistent-quality raw materials that they themselves can either purchase or take
   out as a loan.


           c. Marketing Strategy
Sales of handicrafts continue to be confronted by obstacles in meeting the quantity, quality,
and cost demands of different segments of the market. For producers to be able to take
advantage of new economic opportunities and capture new market segments they need
assistance in expanding their production capacity, in upgrading the quality of their products
to the standards demanded by buyers, and in overcoming the many obstacles they face in
meeting the requirements of the targeted markets.
Core Constraints:
The core constraints in marketing are the following:
   •   Inability to produce products that reflect the market needs or the city’s heritage.
       What is produced is a mishmash of products that are replicas of what is made in
       other parts of Jordan.
   •   Product design is poor and innovation is lacking.
   •   Problems in achieving consistency of quality.
   •   The prices are not set properly, which impacts the competitiveness of the Aqaba
       handicrafts prices.
   •   Little adherence to delivery schedules and quantities, which was one of the main
       issues the traders highlighted when questioned about buying Aqaba-made
       handicrafts products.
   •   No research or understanding of the market needs.
   •   Poor marketing efforts are scattered without utilizing specific sales channels.
                                     Aqaba Community and Economic Development (ACED) Program –59
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
   •   No branding, theme or story that characterizes the products and attracts the
       buyers.
   •   No differentiation between the different market segments with specific products
       that respond to their market segment needs.
The above constraints affect the ability of the sector to sell quantities that sustain
handicrafts projects in Aqaba.


1. Overall Marketing Strategy
The overall marketing strategy focuses on the steps needed to enhance the marketing
efforts of the sector to capture a larger market share, and to seize the opportunities
associated with the expanding tourism and corporate investments being made. The
marketing strategy focuses on identification of the most appropriate market niches,
ensuring proper market access, branding, and marketing of the products efficiently.
The strategy will enable collective marketing of the artisans’ products through the
establishment of a marketing consortium and will incorporate the use of the fair trade
approach, which has proved to be successful in marketing handicrafts.
   "Fair Trade is a trading partnership, based on dialogue, transparency and respect that
   seeks greater equity in international trade. It contributes to sustainable development by
   offering better trading conditions to, and securing the rights of, marginalized producers
   and workers - especially in the South. Fair Trade organizations (backed by consumers)
   are engaged actively in supporting producers, awareness raising and in campaigning for
   changes in the rules and practice of conventional international trade". For details see
   the Core Documents CD.
Utilizing the above fair trade approach through a consortium entails strong branding and
marketing efforts to tell the stories of the people who are making these products, as well
as involving corporate clients through their corporate social responsibility activities. Based
on the influx of tourists revealed by the survey, and the average budgets for foreigners and
Jordanian tourists, it is expected that the market for the handicrafts products in Aqaba may
reach almost US$7 million per year in the coming five years if the growth pattern of
tourists continue.


The following main pillars make up the marketing strategy:


Pillar I: Increase Market Access
Increasing market access of handicrafts products will be achieved through the following
main activities:
   1. Developing products based on customer preferences
   The products that are made must be developed based on target market information
   and detailed customer preferences. This can be achieved by:
   •   Understanding the needs of the target market;



                                     Aqaba Community and Economic Development (ACED) Program –60
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
•   Translating the needs into meaningful, beautifully- and well-designed products that
    fulfill them; and
•   Delivering quality products to the consumer in a timely manner.
2. Formation of a Handicrafts Marketing Consortium
The establishment of a marketing consortium composed of producers in the sector
would help in the collective marketing and selling of the products. This might be
accomplished through sourcing of sales orders that could be met through group
cooperation, the distribution of benefits to all producers, and the reduction of selling
and marketing costs.
The consortium would need to emphasize the fair trade approach. Products would be
linked to the communities and producers via hangtags that tell a bit about the product,
the production process, or a related unique story. The use of hangtags has proven to
add value to handicrafts products and give tourists a feeling that they have a unique
product with a unique story.
3. Tapping all available market segments (tourists, retail souvenir shops,
   corporate clients, etc.)
The marketing strategy encourages producers to target certain market segments. All of
the products developed need to be demand-driven, based on the specificities of the
individual markets:
•   The tourist market targeting foreigners and locals: Foreign tourists are interested in
    aesthetically pleasing, cultural products, as well as products that represent Aqaba.
    Jordanians will look for jewelry and home decorations, as well as products that
    represent Aqaba. Continuous research and analysis should be utilized to
    understand the demands of each market segment as they evolve over time.
•   Retail souvenir shops: These shops represent significant sales channel potential.
    Selling to this segment requires specific agreements with retail shops for the proper
    display of products and the adequate marketing of the products as "Made in Aqaba."
•   Corporate clients: It is anticipated that this segment will represent a substantial
    share of the market in the near future, as corporate clients vie to foster their
    corporate social responsibility image.
4. Direct selling through the establishment of a central showroom or
   market place
Showrooms are needed to showcase the beauty, value and aesthetics of each unique
piece under one roof for consumer selection. Setting up a conveniently located
showroom with the right assortment of products will help market the Aqaba
handicrafts products and make them more accessible. This should be housed near the
center of town in an accessible area that is frequented by tourists. Efforts should begin
now to explore the location of such facility in the area to be developed by Al Mabaar,
so as to capture a portion of the cruise-line tourist trade. Also, new mega-projects
should allocate areas to showcase some of the local handicrafts.




                                 Aqaba Community and Economic Development (ACED) Program –61
                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
   5. Establish contacts with tour guides and bus drivers that will help in
      bringing tourists to the handicrafts showrooms
   Tour guides and bus drivers play an important role in marketing handicraft products.
   Contacts with tour guides and bus drivers should be established to ensure that
   producers are visited, core shopping areas are included in tours, and that buying
   handmade products from Aqaba is an essential part of every tourist’s experience. Tour
   guides and bus drivers might develop specialty tours to Aqaba handicrafts showrooms
   as part of a local cultural experience time, which can capture a good portion of the
   tourist market.
   6. Tapping the other markets in Jordan
   Aqaba handicrafts products should not depend only on the Aqaba market. Other
   regions of Jordan represent an opportunity where Aqaba-produced handicraft products
   can be sold. Expansion of marketing to other areas should be initiated when the sector
   is sufficiently producing enough quantities and the quality is reaching acceptable levels;
   this is expected to be achieved in 3-5 years from the start of aggressive development of
   the sector.
   7. Price products correctly
   Pricing is fundamental to the success of any marketing or sales effort. The pricing of the
   handicrafts products should be thought through carefully, responding to market
   requirements while not overlooking the uniqueness of each piece. Pricing should reflect
   the cost of the product as well as a realistic profit margin that will guarantee the
   sustainability of the project, while maintaining its competitiveness in the marketplace.
   This requires researching the target market, understanding the market competition,
   and knowing the true costs of production.
   8. Research and continual update of market needs
   Understanding continually evolving market needs is a key to producing sellable
   products, and these needs must be reflected in the products made. Research on
   designs, quality, prices, packaging and other information should be collected, analyzed
   and updated continually.
   9. Training on selling and marketing techniques
   Equipping Aqaba handicrafts producers with the right skills for selling and marketing
   their products is important for the sector’s sustainability. This will be done through
   training in marketing and selling techniques.


Pillar II: Branding and Promotion
   1. Branding
   The creation of a common brand for Aqaba handicrafts is essential for the development
   of the sector. Aqaba handicrafts should be themed under one specific brand that
   reflects the heritage and traditions of the city. A stamp or logo should be designed that
   characterizes all the products made in Aqaba. Souvenir shops that sell products
   handmade in Aqaba should have a sign that emphasizes this and shows that retailers are
   sourcing locally made products. ASEZA must become involved in the licensing of such
   branding and its strict enforcement.

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                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
   2. Creation of a story
   Telling of artisans' unique stories is frequently a critical component to marketing their
   craft. Thus a component of the marketing effort should focus on documenting their
   stories, their techniques, and anything that adds to their products’ uniqueness. This can
   be done by adding hangtags to each product giving extra value to the uniqueness of
   each product. Recognition of the people and organizations contributing to the
   enhancement of the artisans’ living standards might be emphasized as well.
   3. Organizing exhibitions and festivals
   The sector stakeholders must join to organize themed exhibitions and festivals that
   represent Aqaba's culture and traditions. Examples of possible festivals include the
   following:
   •   Semsemieh (traditional instrument) festival
   •   Festival of the date
   •   Festival for opening of the fishing season
   •   Traditional music festival
   •   Palm baskets festival
   •   Film festival in cooperation with the new film school, the Red Sea Institute of
       Cinematic Studies
   4. Creation of a website
   Informing the public and potential tourists, both within and outside of Jordan, about
   Aqaba handicrafts is important for promoting the sector. A website that is linked to the
   key tourism sites in Aqaba, as well as those in Jordan, should be developed. Information
   on the site should include products, where to find them, who produces them, as well
   as the unique stories of the artisans and producers.
   5. Design of attractive brochures
   The sector should print brochures that will help in marketing the sector's products.
   These brochures can be used as a way of promoting products to new customers either
   through direct contacts or through the participation in local, regional or international
   exhibitions.


           d. Institutional Development
This institutional development strategy seeks to respond to the main challenges facing
capacity building in the sector and suggests solutions to these challenges in the context of:
1) the organizational framework and regulation of the sector; 2) the producers' capacity to
produce marketable products; and 3) the availability of an enabling and supporting business
environment that ensures the emergence of entrepreneurs and SMEs in the sector in
Aqaba. The overarching goal of this strategy is to strengthen the institutional and
entrepreneurial capacity of handicrafts producers and stakeholders in Aqaba.
Core Constraints: The core constraints facing the sector are segmented into three main
intervention areas:
   1. The sector's regulation and management
       •   The sector is not officially represented or managed by any entity in Aqaba

                                     Aqaba Community and Economic Development (ACED) Program –63
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
   •   ASEZA plays no proactive regulatory role to enhance the handicrafts quality or
       sales
   •   NGOs are playing the role of producers instead of supporters
   •   Cooperation and coordination between the sector's stakeholders via both
       vertical and horizontal levels is weak
2. The capacities of producers
   •   A lack of vision and planning by producers
   •   Unavailability of tangible entrepreneurial initiatives in the sector due to the
       majority of current producers being predominantly home-based and thus
       running informal businesses (not registered and thus not tracked)
   •   Technical skills, such as management, design, pricing and marketing, are not
       available
   •   Management of the production is very basic, and there in an inability to cope
       with high or prompt demands
   •   Handicrafts production by NGOs is donor-driven and based on the availability
       of funds
   •   NGOs producing handicrafts base their production on short term employment
   •   Producers depend on an unstable labor force with high turnover rates, and
       inconsistent working hours
   •   Weak skills of the local workforce in handicrafts production
   •   Lack of accumulated knowledge and skills in the sector
3. The business-enabling environment
   •   Lack of a supporting legislative or policy environment
          o No policies or regulations that protect local products from market
            competition and imported handicrafts
          o No quality control or certification process of handicrafts products
          o Lack of incentives that encourage producers to grow their businesses
            from informal home-based operations into formal SME businesses
   •   Weak awareness of and access to funding from financial institutions
   •   Lack of information, statistics, and databases related to the sector
   •   Unavailability of business incubation services to handicrafts business startups




                                 Aqaba Community and Economic Development (ACED) Program –64
                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
The following main pillars makeup the institutional development strategy:


PILLAR 1: Business-Enabling Environment
Ensuring the availability of a supportive business environment for the handicrafts sector in
Aqaba is essential. This includes the legislative environment, the availability of financing,
business support and incentives for entrepreneurship and the aggressive enforcement of
regulations and standards.
1. Amend or issue legislation that support local handicrafts in Aqaba
Aqaba is a Special Economic Zone where imports are not taxed. This affects locally-
produced handcrafts negatively, as they cannot be as competitive due to higher labor and
production costs than off-shore producer’s experience. Laws and regulations governing
handicrafts sold in Aqaba should be revised, and new laws that protect local and traditional
handicraft products need to be issued.
Handicrafts businesses are usually small, informal, and home-based, yet to be a formal
business, they must adhere to the process and requirements of larger businesses. The
establishment of locally-owned handicrafts businesses needs to be eased and encouraged
through proper regulations, such as reducing income taxes, subsidizing registration fees and
required capital, and rationalizing the certification process.
2. Establish a quality control system and certification system for Aqaba
handicrafts
A quality control system should be initiated for handicrafts to ensure the creation of
competitive local handicrafts in Aqaba and to encourage producers to produce quality
products. Local handicrafts should be certified to ensure preservation of traditional
products and heritage and to encourage marketable, branded production by producers.
This should be administered by an appropriate governing body in coordination with
ASEZA, the regulatory body in the ASEZ.
3. Foster access to available financing
Access to financing is currently difficult. While there are a number of micro-credit
institutions housed in Amman with branches in Aqaba, few small producers know how to
access them. ASEZA, through its Local Community Development Directorate, as well as
the ACED Program Incubator can assist in promoting these financial institutions within the
community, NGOs who deal with home-based producers, the producers' association, the
incubator and the handicrafts design training and exhibition center.
4. Build databases and studies related to the sector
Sound planning requires easy access to information about the handicraft sector. A database
with information about producers, their locations, sales, and customers would be critical
for a potential entrepreneur and the government.
5. Link handicraft entrepreneurs to the newly-formed business incubator
A handicraft business incubator will provide technical assistance to those who are willing to
transform their business from the informal stage into the formal stage. These services
include: 1) venue; 2) office services; 3) access to business services such as legal, accounting,
personnel and computer technical support; 4) training; 5) product design and development
assistance; and 6) business coaching and consulting. At the time of the study, the ACED
                                      Aqaba Community and Economic Development (ACED) Program –65
                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Program, in cooperation with Noor Al Hussein Foundation – Aqaba Women's Center, was
setting up a micro-business incubator targeting this sector.


PILLAR II: Producer’s Capacities
1. Conduct a comprehensive capacity building program for NGOs supporting
handicrafts producers
NGOs in Aqaba that are supporting handicrafts producers lack essential skills in planning,
management, pricing and marketing. By building the capacity of these NGOs in these and
other key areas, they will become effective supporters to informal businesses and home-
based producers, which will foster sector business success.
2. Initiate a capacity building program in alliance with the business incubator
and the satellite Jordan Handicrafts Producers Association
Producers of handicrafts need to be competent in order to be successful. Informal
producers, who are willing to start a business in this sector, need to know how to do it
properly. These producers can be supported by providing them with required knowledge
and skills in this area. This includes training in pricing and costing, marketing, basic
accounting, business management, basic research and the conducting of feasibility studies.


PILLAR III:     Handicrafts Sector Regulation and Management
This pillar addresses the representation and the main stakeholders of the sector in Aqaba.
There is no governing body that currently represents the handicrafts sector in either
Aqaba or Jordan. Though currently made-up of marginalized and fragmented entities, this
sector needs a strong entity to support and direct the collective movement towards
progress, new markets, and attracting new stakeholders, while supporting its members and
fostering horizontal and vertical linkages.
1. Create and effectively run a Handicraft Development Taskforce
The need for official oversight of the sector in Aqaba is vital for its progress, and ASEZA
should encourage the creation of a Handicraft Development Taskforce. The taskforce
could coordinate advocacy initiatives providing the required oversight and regulation of the
sector, with a mandate to support and represent the sector at the first stage of the
strategy implementation. Following the initial phase, the taskforce will then foster the
transfer of core responsibilities to the design training and exhibition center. The main
responsibilities of the taskforce would be the following:
 - Coordinate advocacy initiatives would result in issuing policies and regulations related
   to the sector which aim at easing the process of investing in the sector by
   entrepreneurs, and which increase the competitive advantage of handicrafts;
 - Represent the sector in national, regional and international events;
 - Supervise the setting up of a quality assurance and control systems for local
   handicrafts;
 - Support the marketing of local handicrafts;
 - Establish the training (design) and exhibition handicrafts center in Aqaba; and


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                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 - Facilitate the establishment of a producers association for Aqaba city linked to the
   producers association in Amman.
The Handicraft Development Taskforce should initially be a joint initiative between ASEZA
and the private sector, with the role of ASEZA limited to coordination and promotion. The
Taskforce can consist of three representatives of the private sector, three representatives
of ASEZA, the Ministry of Tourism and ADC, one representative of the incubator, two
representatives of NGOs, one representative of ACED Program and one representative
from a Handicraft Association from Amman (as possible).
2. Establish and effectively run the Handicraft Design, Training and Exhibition
Center
The Handicraft Development Taskforce should encourage the development of the
Handicraft Design, Training and Exhibition Center which will be responsible for providing
needed training and building local expertise in the areas of design, production, pricing and
marketing of handicraft products. The Handicraft Design, Training and Exhibition Center
could also provide a permanent exhibition facility for local handicrafts, which would be
promoted as a tourist attraction through agreements with tour guides, tour operators and
hotels. This may be targeted by the new investments in Aqaba as a prime idea for
development. A space within the Center should also be established which allows tourists
to see artisans working on their crafts. At first this should be a space rented free-of-charge
to the producers, but as producers become self-sustaining entrepreneurs, the space should
be rented for a nominal fee. A lottery system could be used to allow different producers to
work and display their items for 3-month time periods.
3. Establish a satellite producers association in Aqaba
The sector currently lacks the existence of business-oriented producers. Producers will
need professional representation to assist them in aggregating risks and opportunities, as
well as to provide a chance to learn from their peers. The establishment of the Handicrafts
Producers Association of Aqaba will represent producers’ interests before official bodies,
increase horizontal linkages and cooperation amongst producers, support marketing of
local products and motivate producers to provide high quality products.




                                     Aqaba Community and Economic Development (ACED) Program –67
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 VII.        Action Plan

The Action Plan outlined following describes the actions and activities planned to be
implemented in order to undertake the described strategy and achieve its objectives and its
vision in the long run.
Segments and Components:
The Action Plan is divided into three main sections based on its components; 1) action plan
for product development, 2) marketing action plan, and 3) capacity building action plan.
Each section illustrates activities required, responsible entities for the activities, resources
needed, targets aimed to be achieved, time frame per activity and cost estimates.
Phases:
The Action Plan is proposed to cover a five-year duration (2008 – 2012), where this period
is divided into two main phases:
        •   Phase one entails all the activities planned to take place during 2008 and 2009,
            while phase two entails all the actions planned to be implemented in 2009,
            2010, 2011 and 2012. The segmentation of the Action Plan into two phases
            reflects the characteristics of each phase. Phase one is mainly the phase of
            setting the foundation of the sector in Aqaba in the sense of establishing
            infrastructure required, organizational setups, resources, studies and databases
            needed for the success of the sector.
        •   Phase two is the growth phase where the foundation and resources settled will
            be utilized to transfer this sector from the initiation stage into an income
            generating sector. It is envisioned that by the end of the five-year Action Plan,
            the sector will be a stand-alone sector, capable of supporting itself.
Costing:
To provide tangible numerical indicators for the use by the implementers of the Action
Plan and for the sector's decision-makers, the cost of implementing each component of the
Action Plan was estimated by phases and for the total, where the implementation cost for
each component as a whole was calculated and the required financial investment in each
phase estimated separately.
Production Projects Costing:
Approximate costs for individual product lines are presented in Annex 3 to assist the
reader; however, all of the products do not need to be developed together. After feasibility
studies are completed for chosen areas, the number of product lines and areas can be
determined based on available budgets. These costs were estimated on the higher side,
and can change depending on experienced training and product needs.
The detailed Action Plan is presented in the following tabulation to provide a holistic and
detailed view on what actions are required in each component, who will implement, when
to implement, how to measure attainment and with what cost.

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                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           7.1 PRODUCT DEVELOPMENT ACTION PLAN FOR THE HANDICRAFT SECTOR IN AQABA (2008 – 2012)



Pillar 1: Product Development and Design

           Action 7.1.1. Hire qualified designers and create new designs and products

                                               Responsible     Resources where                        Budget      Budget     Budget                          Time Frame
                        Activities                                                      Targets
                                                 Entity           applicable                         Total (JD)   Phase 1    Phase     2
                                                                                                                  (JD)       (JD)           2008     2009      2010       2011        2012

           Identify potential experts in                                                                 *           *            *
                                                             Create a database from
7.1.1.1    product development and design -    Incubator
                                                             which to draw on
           international and local expertise


                                                                                      5-10 product       *           *            *
                                                             Hire a local designer
7.1.1.2    a. Textile - rugs                   Incubator                              lines
                                                             through the incubator
                                                                                      produced


                                                             Hire an international    5-10 product       *           *            *
7.1.1.3    b Textile - bags                    Incubator     designer to mentor       lines
                                                             local designer           produced


                                                             Upgrade and diversify    5-10 product       *           *            *
7.1.1.4    c. Sand bottle                      Incubator     designs and bottles      lines
                                                             used                     produced


                                                                                      5-10 product       *           *            *
7.1.1.5    d. Palm Leaves                      Incubator     International            lines
                                                                                      produced


                                                                                      5-10 product       *           *            *
7.1.1.6    e. Eco-friendly - paper products    Incubator     International            lines
                                                                                      produced

          * Approximate amounts maybe revealed based on discussions with the ACED Program




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                                                                                                                          Budget        Budget                         Time Frame
                                                Responsible        Resources where                            Budget
                         Activities                                                           Targets                     Phase     1   Phase      2
                                                  Entity              applicable                             Total (JD)
                                                                                                                          (JD)          (JD)            2008      2009     2010      2011        2012
                                                                 Hire an international                           *             *              *
                                                                                            5-10 product
7.1.1.7     f. Eco-friendly - glassware         Incubator        designer to mentor local
                                                                                            lines produced
                                                                 designer

                                                                                            5-10 product         *             *              *
7.1.1.8     g. Jewelry                          Incubator        Local
                                                                                            lines produced

                                                                                            5-10 product         *             *              *
7.1.1.9     h. Ceramic                          Incubator        International
                                                                                            lines produced

                                                Handicraft                                  Accomplish 30        *             *              *
            Conduct feasibility study for 30    Development                                 studies within
7.1.1.10    companies corresponding to          Task    Force,                              150 working
            identified product lines            Incubator,                                  days, 5 days
                                                IRADA                                       per company

7.1.1.11    Upgrade existing product lines      Incubator,       International consultant   3-4 upgrades
                                                                                                                 *             *              *
            (assess current product lines,      Design     and                              per area
            produce new product lines and       Handicraft
            serve as mentor to design staff )   Design,
                                                Training and
                                                Exhibition
                                                Center


7.1.1.12    Develop new product areas or        Incubator,       Local designers            5-10 product
                                                                                                                 *             *              *
            lines produced                      Handicraft                                  lines produced
                                                Design,
                                                Training and
                                                Exhibition
                                                Center



               Total cost for action 7.1.1 is                                                                    *             *              *


           * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                          Aqaba Community and Economic Development (ACED) Program –70
                                                                                                                             Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.1.2. Develop incentives for product designs and development


                                                                          Resources                                   Budget     Budget                         Time Frame
                                                                                          Targets         Budget
                     Activities                Responsible Entity           where                                     Phase 1    Phase 2
                                                                                                         Total (JD)
                                                                          applicable                                   (JD)       (JD)
                                                                                                                                             2008       2009       2010        2011       2012
                                                                                        Monetary
                                                                        JD 10,000 for                        *           *           *
                                                                                        awards
           Conduct design competition for    Handicraft Development
7.1.2.1                                                                 each of 3       delivered to
           producers                         Task Force
                                                                                        winner
                                                                        product areas   annually
           Create committee for reviewing    Handicraft Development
                                                                                                             *           *           *
           products made up of private       Taskforce and Handicraft                   Governing
7.1.2.2
           sector, designers, government     Design, Training and                       body created
           and other key entities            Exhibition Center
                                             Handicraft Development
                                                                                        Rules      and       *           *           *
           Create design competition rules   Taskforce and Handicraft
7.1.2.3                                                                                 regulations
           and mandates                      Design, Training and
                                                                                        created
                                             Exhibition Center
                                                                                        1500
                                             Handicraft Development                                          *           *           *
                                                                                        brochures
                                             Taskforce and Handicraft
7.1.2.4    Promote design competition                                                   and
                                             Design, Training and
                                                                                        pamphlets
                                             Exhibition Center
                                                                                        distributed
                                                                                        100%        of
                                             Handicraft Development                                          *           *           *
                                                                                        producers in
           Collect products, review          Taskforce and Handicraft
7.1.2.5                                                                                 Aqaba submit
           products, award winners           Design, Training and
                                                                                        products for
                                             Exhibition Center
                                                                                        review
                                                                                        3      winners
                                             Handicraft Development                                          *           *           *
                                                                                        awarded - 1st
           Hold a promotional event for      Taskforce and Handicraft
7.1.2.6                                                                                 and        2nd
           winners, runners up.              Design, Training and
                                                                                        runners-up
                                             Exhibition Center
                                                                                        and winner
                                                                                                             *           *           *
            Total cost for action 7.1.2 is

          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                       Aqaba Community and Economic Development (ACED) Program –71
                                                                                                                          Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
          Pillar 2: Training and Learning Initiatives

          Action 7.1.3 Conduct a comprehensive business training program for producers
                                                                        Resources         Targets       Budget       Budget     Budget                         Time Frame
                       Activities             Responsible Entity          where                                      Phase 1    Phase 2
                                                                        applicable                      Total (JD)   (JD)       (JD)        2008       2009       2010        2011       2012
          Training on product development    Incubator phase 1;
                                                                     Need qualified                         *           *           *
          (Trainings should be 15-20 people  Handicraft     Design,
7.1.3 1                                                              trainers      and 3 per year
          max. # of trainings will depend on Training and Exhibition
                                                                     materials
          # of entrepreneurs identified)     Center Phase 2
                                             Incubator phase 1;
                                                                                                            *           *           *
          Training on Production             Handicraft     Design,
7.1.3.2                                                              2-3 day trainings 1 per year
          Techniques and Productivity        Training and Exhibition
                                             Center Phase 2
                                             Incubator phase 1;
                                                                                                            *           *           *
                                             Handicraft     Design,
7.1.3.3   Training in Costing and Pricing                            2-3 day trainings 3 per year
                                             Training and Exhibition
                                             Center Phase 2
                                             Incubator phase 1;
                                                                                                            *           *           *
                                             Handicraft     Design,
7.1.3.4   Training in management                                     2-3 day trainings 3 per year
                                             Training and Exhibition
                                             Center Phase 2
                                             Incubator phase 1;
                                                                                                            *           *           *
                                             Handicraft     Design,
7.1.3.5   Training in marketing                                      2-3 day trainings 3 per year
                                             Training and Exhibition
                                             Center Phase 2
                                             Incubator phase 1;
                                                                                                            *           *           *
                                             Handicraft     Design,
7.1.3.6   Training in Business Development                           2-3 day trainings 2 per year
                                             Training and Exhibition
                                             Center Phase 2
                                             Incubator phase 1;
                                                                                                            *           *           *
                                             Handicraft     Design,
7.1.3.7   Training in Design and Innovation  Training and Exhibition 2-3 day trainings 3 per year
                                             Center Phase 2

                                             Incubator phase 1;
                                                                                                            *           *           *
          Training in Computer Aided         Handicraft     Design,
7.1.3.8                                                                2-3 day trainings   2 per year
          Design                             Training and Exhibition
                                             Center Phase 2

            Total cost for action 7.1.3 is                                                                  *           *           *




                                                                                                                      Aqaba Community and Economic Development (ACED) Program –72
                                                                                                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.1.4 Conduct Exchange Programs and Study Tours Focusing on Production Areas

                                                                           Resources                    Budget       Budget     Budget                         Time Frame
                      Activities                Responsible Entity           where         Targets
                                                                           applicable                                Phase 1    Phase 2
                                                                                                        Total (JD)   (JD)       (JD)        2008       2009       2010        2011       2012
                                                                                                            *           *           *
                                                                                         3 exchange
                                                                                         and study
           Identify     and      coordinate                                              tours
           appropriate study tours and                                   JD 20,000 per   implemented
7.1.4.1                                        ACED Program
           exchanges for each product area                               study tour      by end of
           selected                                                                      2009 one per
                                                                                         each product
                                                                                         area


                                                                                                            *           *           *

                                                                                         3 exchange
                                                                                         and study
           Identify appropriate study tours                                              tours
                                               Handicraft     Design,
           and exchange programs locally and                             JD 20,000 per   implemented
7.1.4.2                                        Training and Exhibition
           regionally for most successful                                study tour      by end of
                                               Center
           product areas                                                                 2012 one per
                                                                                         each product
                                                                                         area




                                                                                                            *           *           *
             Total cost for action 7.1.4 is



          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                      Aqaba Community and Economic Development (ACED) Program –73
                                                                                                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
          Pillar 3: Vertical and Horizontal Linkages Created


          Action 7.1.5 Strengthen Producers and Establish systemized relationships between producers and buyers
                                                                               Resources                                      Budget     Budget                         Time Frame
                      Activities                   Responsible Entity                         Targets             Budget
                                                                                 where                                        Phase 1    Phase 2
                                                                                                                 Total (JD)
                                                                               applicable                                      (JD)       (JD)s
                                                                                                                                                     2008       2009       2010        2011       2012
                                                 Private Sector,
                                                                                                                     *           *           *
                                                 Handicraft Development
          Establish producer association in
7.1.5.1                                          Taskforce and Handicraft
          Aqaba
                                                 Design, Training and
                                                 Exhibition Center
                                                 Sign MOUs with the
                                                                                                                     *           *           *
                                                 buyers consortium and
           Establish buyers relationships with
                                                 other           individual                 30     MOUs
7.1.5.2   producers through the buyers                                        incubator
                                                 businesses to provide                      signed
          consortium
                                                 raw      materials      to
                                                 producers                                                                                                 0
                                                                                             Producers
                                                                                                                     *           *           *
                                                                                            using the raw
          Establish a raw material bank          Handicraft     Design,
                                                                                            materials
7.1.5.3   within the Handicraft Design,          Training and Exhibition
                                                                                            bank        to
          Training and Exhibition Center         Center
                                                                                            source
                                                                                            materials
                                                                                                                     *           *           *
            Total cost for action 7.1.5 is




          Total Cost for Implementing Product Development strategic plan                                     *
          (2008 – 2012)
                                                                                                             *
          Cost for implementing phase 1 (2008 - 2009) =

                                                                                                             *
          Cost for implementing Phase 2 (2010 - 2012) =

                 * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                               Aqaba Community and Economic Development (ACED) Program –74
                                                                                                                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
            7.2 MARKETING ACTION PLAN FOR THE HANDICRAFT SECTOR IN AQABA (2008 – 2012)
            Pillar 1: Market Access

            Action 7.2.1 Establishing market accessibility basis for handicraft products
                                                                               Resources                               Budget      Budget                        Time Frame
                                                         Responsible Entity                 Targets    Budget
                             Activities                                          where                                 Phase 1     Phase 2
                                                                                                      Total (JD)
                                                                               applicable                               (JD)        (JD)        2008      2009      2010      2011        2012
            Establish an exhibition area for
7.2.1.1                                                Incubator                                          *               *            *
            handicrafts within the incubator
             Contact tour guides and operators for
7.2.1.2                                                Incubator/ Producers                               *               *            *
            directing tourists to the exhibition area
            Establish contacts with corporate clients
                                                                                                          *               *            *
            within ASEZ for Aqaba produced
7.2.1.3                                                Producers
            corporate handicrafts gifts and
            giveaways
            Identify and establish contacts with new   Producers (Incubator
7.2.1.4                                                                                                   *               *            *
            buyers (retail and wholesales)             may assist)
                                                       Incubator or Handicraft
            Establish a market research and                                                               *               *            *
7.2.1.5                                                Development Taskforce
            information data base
                                                       or Association
            Participation in exhibitions and trade     Producers (Incubator
7.2.1.6                                                                                                   *               *            *
            fairs inside Jordan (at least 2 each year) may assist)
            Establish the Marketing and Sales
                                                       Producers or Handicraft                            *               *            *
7.2.1.7     Consortium and hire one manager and
                                                       Development Taskforce
            two staff
            Rent an exhibition area within the
7.2.1.8                                                Marketing Consortium                               *               *            *
            Design, Training and Exhibition Center
            Identify new buyers and establish
7.2.1.9                                                Marketing Consortium                               *               *            *
            contacts with them
            Participation in exhibitions and trade     Marketing Consortium
                                                                                                          *               *            *
7.2.1.10    fairs inside and outside Jordan (two       or Handicraft
            each year)                                 Development Taskforce
                Total cost for action 7.2.1 is                                                            *                *           *


           * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                   Aqaba Community and Economic Development (ACED) Program –75
                                                                                                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Pillar 2: Branding and Promotion

           Action 7.2.2. Developing a unique Brand for Aqaba

                                                                          Resources                           Budget       Budget                       Time Frame
                                                   Responsible Entity                  Targets    Budget
                        Activities                                          where                             Phase 1      Phase 2
                                                                                                 Total (JD)
                                                                          applicable                           (JD)         (JD)
                                                                                                                                       2008      2009      2010      2011        2012
                                                                                                     *            *            *
           Design a unified and attractive      Handicraft Development
7.2.2.1
           packaging for Aqaba handicrafts      Taskforce or Producers


           Design a logo and signature for                                                           *            *            *
                                                Handicraft Development
7.2.2.2    Aqaba handicrafts that give
                                                Taskforce or Producers
           uniqueness to its products

                                                                                                     *            *            *
           Design and print brochures for the
7.2.2.3                                         Producers
           Handicraft Sector in Aqaba


           Design and operate a web site for    Handicraft Development                               *            *            *
7.2.2.4    the Handicraft Sector and link it    Taskforce / Incubator /
           with other tourism sites in Jordan   Producers

                                                Marketing Consortium/                                *            *            *
           Establish a certificate/stamp for
7.2.2.5                                         Handicraft Development
           shops selling Aqaba handicrafts
                                                Task Force

                                                                                                     *            *            *
           Update the web site and Brochures
7.2.2.6                                         Marketing Consortium
           of the sector


              Total cost for action 7.2.2 is                                                         *            *            *



          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                          Aqaba Community and Economic Development (ACED) Program –76
                                                                                                             Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
          Pillar 3: Capacity Building

          Action 7.2.3 Hire qualified staff for sales and train the producers
                                                                                 Resources                                     Budget      Budget                        Time Frame
                                                      Responsible Entity                        Targets            Budget
                       Activities                                                  where                                       Phase 1     Phase 2
                                                                                                                  Total (JD)
                                                                                 applicable                                     (JD)        (JD)
                                                                                                                                                        2008      2009      2010      2011        2012
          Hire a marketing and sales person                                                                           *            *           *
7.2.3.1                                            Incubator
          within the incubator

                                                                                              4 courses are           *            *           *
7.2.3.2   Provide a marketing and sales training   Incubator                                  provided   in
                                                                                              each year


                                                                                              4 courses are           *            *           *
          Provide training courses in sales and    Handicraft Design, Training
7.2.3.3                                                                                       provided   in
          marketing                                and Exhibition Center
                                                                                              each year


                 Cost for action 7.2.3 is                                                                             *            *           *




          Total cost for implementing the Marketing strategic plan (2008 - 2012) =                            *


          Cost for implementing phase 1 (2008 - 2009) =                                                       *


          Cost for implementing Phase 2 (2010 - 2012) =                                                       *


          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                           Aqaba Community and Economic Development (ACED) Program –77
                                                                                                                              Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
          INSTITUIONAL DEVELOPMENT ACTION PLAN FOR THE HANDICRAFT SECTOR IN AQABA (2008 – 2012)
          Pillar 1 : Business Enabling Environment


          Action 7.3.1 Create and effectively run a Handicraft Development Taskforce within ASEZ, whose mandate is to organize and coordinate the support of the sector
                                                                                                        Budget Budget        Budget                   Time Frame
                                                                   Resources
                     Activities                Responsible Entity                    Targets            Total    Phase 1 Phase 2
                                                                   where applicable
                                                                                                        (JD)     (JD)        (JD)       2008     2009    2010     2011                 2012
                                                                                      Dept. establishment   *           *           *
                                                 Handicraft
          Develop the Handicraft Development                     One          local   regulations     are
7.3.1.1                                          Development
          Taskforce                                              consultant           ready by end of
                                                 Taskforce
                                                                                      Dec2008

                                                 Handicraft                                                 *           *           *
          Develop mission, vision and business   Development     One          local
7.3.1.4
          plans on running the taskforce                         consultant
                                                 Taskforce


                                                 Handicraft                                                 *           *           *

7.3.1.5   Implement the business plan            Development
                                                 Taskforce


                                                 Handicraft                                                 *           *           *
          Monitor and evaluate the               Development
7.3.1.7
          achievements of the taskforce
                                                 Taskforce


             Total cost for action 7.3.1 is                                                                 *           *           *



          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                Aqaba Community and Economic Development (ACED) Program –78
                                                                                                                   Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.3.2. Establish and effectively run a handicraft design and exhibition center

                                                                            Resources                                         Budget     Budget                         Time Frame
                                                                                                                  Budget
                      Activities                 Responsible Entity           where              Targets                      Phase 1    Phase 2
                                                                                                                 Total (JD)
                                                                            applicable                                         (JD)       (JD)
                                                                                                                                                     2008       2009       2010        2011       2012

           Conduct 2 study tours to other       Handicraft                                                           *           *           *
7.3.2.1    cities who have design centers to    Development
           learn from their experience          Taskforce

                                                                                                                     *           *           *
           Develop the establishment plan of
                                                Handicraft
           the Center (structure, roles and                               International
7.3.2.2                                         Development
           responsibilities, management and                               consultant
                                                Taskforce
           reporting)

                                                Handicraft
           Acquire the location and equip the                                                                        *           *           *
7.3.2.3                                         Development
           Center
                                                Taskforce
                                                Handicraft
           Hire the manager of the Center                                                                            *           *           *
7.3.2.4                                         Development
           and key staff
                                                Taskforce
                                                                          Consultant with
                                                Handicrafts    Design,                                               *           *           *
           Develop the strategy and business                              expertise       in
7.3.2.5                                         Training and Exhibition
           plan for the Center                                            handicraft
                                                Center
                                                                          training centers
                                                                                               Min.          2
                                                                                                                     *           *           *
                                                                                               exhibitions
                                                Handicrafts    Design,                         with        an
           Conduct exhibitions inside the
7.3.2.7                                         Training and Exhibition                        audience of
           Center for handicraft products
                                                Center                                         100
                                                                                               international
                                                                                               tourists
                                                                                                                     *           *           *
             Total cost for action 7.3.2 is


          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                               Aqaba Community and Economic Development (ACED) Program –79
                                                                                                                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.3.3 Establish and operate a handicraft’s producers association
                                                                                                                                                          Time Frame
                                                                            Resources                           Budget     Budget
                                                                                                    Budget
                       Activities                 Responsible Entity          where      Targets                Phase 1    Phase 2
                                                                                                   Total (JD)
                                                                            applicable                           (JD)       (JD)
                                                                                                                                       2008       2009       2010        2011       2012
           Conduct preparatory meetings with     Handicraft Development                                *           *           *
7.3.3.1
           handicraft producers in Aqaba         Taskforce
           Conduct a study tour for the core                                                           *           *           *
           people to visit other crafts
                                                 Handicraft Development
7.3.3.2    producers associations in other
                                                 Taskforce
           countries (Tunisia is suggested as
           one destination)

           Prepare the bylaws and statute of     Handicraft Development                                *           *           *
7.3.3.3                                                                    Consultant
           the Association                       Taskforce

7.3.3.4    Register the Association              Producers                                             *           *           *
                                                 Association established                               *           *           *
           Formulate the general assembly and    with    support    from
7.3.3.5
           elect the board                       Handicraft Development
                                                 Taskforce
           Hire the manager and the                                                                    *           *           *
7.3.3.6                                          Association board
           membership officer
           Prepare the Association’s strategy,                                                         *           *           *
           internal rules and regulations,
7.3.3.7                                          Association manager       consultant
           membership system and services,
           and business plan

           Implement the strategy and                                                                  *           *           *
7.3.3.8                                          Association manager
           business plan of the Association

7.3.3.9    Conduct annual member’s activity      Producers association                                 *           *           *
                                                                                                       *           *           *
           Total cost for action 7.3.3 is


          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                 Aqaba Community and Economic Development (ACED) Program –80
                                                                                                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.3.4. Conduct a "how to support handicraft producers" program with NGOs

                                                                                                                                                            Time Frame
                                                                        Resources                                  Budget    Budget
                       Activities                Responsible Entity                     Targets        Budget
                                                                          where                                    Phase 1   Phase 2
                                                                                                      Total (JD)
                                                                        applicable                                  (JD)      (JD)
                                                                                                                                          2008       2009       2010       2011           2012
                                                                                                          *           *          *
           Conduct a study tour for NGOs
                                                 Handicraft
           to another country where NGOs
7.3.4.1                                          Development
           are playing an efficient supporting
                                                 Taskforce
           role to handicraft producers


                                                                                                          *           *          *

                                                                                      4 workshops
           Conduct training for NGOs on          Handicraft                           conducted on
                                                                      International
7.3.4.2    role of NGOs in supporting            Development                          role of NGOs
                                                                      consultant
           handicraft producers                  Taskforce                            in supporting
                                                                                      producers



                                                                                                          *           *          *
             Total cost for action 7.3.4 is



          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                   Aqaba Community and Economic Development (ACED) Program –81
                                                                                                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Pillar 2: Producer Capacities

           Action 7.3.5 Conduct a comprehensive capacity building program for NGOs who support handicraft producers. Program to include; strategic planning, management
           skills, marketing for micro-businesses and accounting.
                                                                        Resources                                Budget  Budget             Time Frame
                                                                                         Targets       Budget
                        Activities                Responsible Entity      where                                  Phase 1 Phase 2
                                                                                                      Total (JD)
                                                                        applicable                                (JD)    (JD)   2008 2009     2010       2011    2012
           Selection of NGOs who will be
                                                 Handicraft                                               *         *       *
           subjected to the training based on
7.3.5.1                                          Development
           criteria, main factor is the level of
                                                 Taskforce
           potential support to MSMEs
                                                                                       Program
                                                                     Trainers        &                    *         *       *
                                                 Handicraft                            material and
           Design the training program for                           consultants for
7.3.5.2                                          Development                           content     is
           NGOs                                                      the        design
                                                 Taskforce                             ready by end
                                                                     program
                                                                                       of 2009
                                                 ACED Program -
                                                                                       4 workshops        *         *       *
           Train selected NGOs on strategic      Component 3 is
7.3.5.3                                                              Trainers          conducted by
           planning and business planning        working on NGO
                                                                                       end of 2010
                                                 capacity building
                                                 ACED Program -
           Train selected NGOs on                                                      8 workshops        *         *       *
                                                 Component 3 is
7.3.5.4    management skills (HR and                                 Trainers          conducted by
                                                 working on NGO
           financial)                                                                  end of 2010
                                                 capacity building
           Provide technical support to
                                                 Handicraft                                               *         *       *
           NGOs to develop their support                             Int. and local
7.3.5.5                                          Development
           plans for handicrafts producers                           consultants
                                                 Taskforce
           and to implement their programs
           Provide NGOs who have crafts
                                                                                                          *         *       *
           production as part of their income
           generating activities with            Handicraft
                                                                     Relevant
7.3.5.6    management systems required to        Development
                                                                     consultants
           succeed (documentation of sales       Taskforce
           and residues, pricing, accounting
           and budgeting)
                                                                                                *          *           *
             Total cost for action 7.3.5 is

          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                         Aqaba Community and Economic Development (ACED) Program –82
                                                                                                            Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.3.6 Conduct a capacity building program for handicraft producers either formal or informal, program to include; how to start a business, business planning,
           production management, budgeting, pricing, marketing, accounting, and conducting feasibility studies for new products.
                                                                                                       Budget   Budget    Budget
                                                Responsible Entity       Resources        Targets                                                Time Frame
                       Activities                                                                       Total   Phase 1 Phase 2
                                                                       where applicable
                                                                                                        (JD)      (JD)     (JD)   2008     2009     2010     2011        2012
                                                                                        A list of
                                                                                                          *         *        *
                                               Incubator or later the                   micro-
           Scan home-based handicraft          Handicraft     Design,                   businesses is
7.3.6.1
           businesses available in Aqaba       Training and Exhibition                  produced
                                               Center                                   and updated
                                                                                        annually
           Select home-based businesses to
                                               Incubator or later the                                     *         *        *
           be subjected to the training                                                 30     home-
                                               Handicraft     Design,
7.3.6.2    package based on their potential                                             based
                                               Training and Exhibition
           to turn into profitable formal                                               selected
                                               Center
           businesses
                                                                                        30     home-
                                                                                                          *         *        *
           Implement the training package      Incubator or later the                   based
           with home-based micro businesses Handicraft        Design,                   businesses
7.3.6.3
           those of potential growth into a    Training and Exhibition                  trained on
           formal business                     Center                                   the       full
                                                                                        package
                                               Incubator or later the                   5      micro-
                                                                                                          *         *        *
           Provide technical support to crafts Handicraft     Design,                   small
7.3.6.4
           producers                           Training and Exhibition                  businesses
                                               Center                                   assisted

            Total cost for action 7.3.6 is                                                            *         *           *


          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                               Aqaba Community and Economic Development (ACED) Program –83
                                                                                                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Pillar III : Sector’s Regulatory and Management

           Action 7.3.7 Amend or issue legislations that support local handicraft production in Aqaba, easing the process and requirements for the establishment of new businesses
           in crafts sector and protect local production from competition.
                                                                         Resources                                    Budget     Budget                  Time Frame
                                                 Responsible Entity                         Targets       Budget
                         Activities                                         where                                    Phase 1    Phase 2
                                                                                                         Total (JD)
                                                                         applicable                                    (JD)       (JD)    2008      2009    2010     2011    2012
                                                                                         Committee
                                                                                                             *           *          *
           Formulate a committee to review                            Regulations and representing
           laws, regulations and policies                             policy     analyst main
                                                Handicraft
7.3.7.1    affecting handicraft producers and                         with experience regulatory
                                                Development Taskforce
           the establishment of MSMEs in this                         in      handicraft stakeholders is
           sector                                                     sector             formed by end
                                                                                         of August
           Issue an assessment report on
                                                                                         Report              *           *          *
           impact of current laws, regulations
                                                                                         launched     by
7.3.7.2    and policies on local handicraft     Review committee
                                                                                         end of Nov.
           production and market including
                                                                                         08
           policy recommendations
                                                                                         A law/policy
                                                                                                             *           *          *
                                                                                         to      support
                                                                                         local
                                                                                         handicrafts
           Issue supporting laws or policies to Handicraft
7.3.7.3                                                                                  through easy
           local handicraft production          Development Taskforce
                                                                                         registration
                                                                                         processes for
                                                                                         handicraft
                                                                                         businesses
                                                                                         3 workshops
                                                                                                             *           *          *
           Promote policy changes among                                                  conducted
                                                Handicraft
7.3.7.4    handicraft producers and                                                      with
                                                Development Taskforce
           stakeholders through workshops                                                attendance of
                                                                                         150
                                                                                                          *             *           *
               Total cost for action 7.3.7


          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                Aqaba Community and Economic Development (ACED) Program –84
                                                                                                                   Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.3.8 Establish a quality control system and certification system to handicrafts produced in Aqaba
                                                  Responsible                                              Budget    Budget                   Budget                        Time Frame
                       Activities                                       Resources           Targets
                                                      Entity                                                Total    Phase 1                  Phase 2
                                                                    where applicable
                                                                                                             (JD)     (JD)                     (JD)        2008      2009      2010      2011        2012
                                                                            International
           Formulate a committee to establish a                                                                           *          *            *
                                                       Handicraft           consultant and a        Committee
           quality assurance system and a
7.3.8.1                                                Development          local consultant with   formed by end of
           certification process for handicrafts
                                                       Taskforce            experience in quality   Jan.09
           production in Aqaba
                                                                            assurance systems
                                                                                                    Quality assurance
           Endorse the quality assurance system        Handicraft                                                         *          *            *
                                                                                                    system       starts
7.3.8.2    and the certification process for           Development
                                                                                                    operating by end
           handicrafts                                 Taskforce
                                                                                                    of June 09
                                                                                                    Training        on
                                                                                                                          *          *            *
           Train quality assurance personnel at                                                     quality assurance
                                                       Handicraft
           the handicraft dept on how to use the                            Trainer on    quality   system by end of
7.3.8.3                                                Development
           system and how to monitor and                                    assurance               2009,      training
                                                       Taskforce
           report on quality                                                                        repeated before
                                                                                                    end of 2011
           Train the design center on how to
                                                                                                                          *          *            *
           fulfill the quality requirements, so that
                                                       Handicraft Design,   Trainer           on    All      training
           they can implement quality
7.3.8.4                                                Training       and   implementation     of   completed by end
           requirements in their training and
                                                       Exhibition Center    quality requirements    of October 09
           transfer the knowledge to trained
           handicrafts producers
                                                                                                    5 at least register
                                                                                                                          *          *            *
                                                       Handicraft Design,                           for             the
7.3.8.5    Launch the certification process            Training       and                           certification
                                                       Exhibition Center                            before end of
                                                                                                    2009
                                                       Handicraft Design,                           3 products at
                                                                                                                          *          *            *
7.3.8.6    Implement the certification process         Training       and   Technical support       least are certified
                                                       Exhibition Center                            by end of 2010
                                                                                                                          *          *            *
               Total cost for action 7.3.8 is



          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                              Aqaba Community and Economic Development (ACED) Program –85
                                                                                                                                 Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.3.9 Ease the access to financing for micro-enterprise handicraft entrepreneurs in Aqaba
                                                                                Resources                                     Budget      Budget                        Time Frame
                                                                                                              Budget
                           Activities                  Responsible Entity         where         Targets                       Phase 1     Phase 2
                                                                                                             Total (JD)
                                                                                applicable                                     (JD)        (JD)        2008      2009      2010      2011        2012
           Build the database of financial
                                                                                                                 *                *           *
           institutions (F.I.) in Aqaba who can
                                                                                            Database
7.3.9.1    provide financing to handicraft         ACED Program
                                                                                            available
           producers, either home-based or
           formal businesses
                                                                                            3000 copies of
                                                                                                                 *                *           *
                                                                                            the database
           Design and print promotional                                                     and        basic
           material on all support to                                                       information
                                                   Incubator or Handicraft
7.3.9.2    handicraft producers including                                                   on         each
                                                   Development Taskforce
           financial , training marketing and                                               financial
           government support                                                               institution is
                                                                                            published by
                                                                                            end of May 09
                                                                                            100%          of
                                                                                                                 *                *           *
                                                                                            handicraft
                                                                                            producers visit
           Disseminate the above indicated         Handicraft    Development                handicraft
7.3.9.3
           information to producers                Taskforce                                dept at Gov.
                                                                                            or association
                                                                                            to get the
                                                                                            information
                                                                                            50 producers
                                                                                                                 *                *           *
                                                                                            received
                                                                                            funding from
                                                   Handicraft    Development Consultant
                                                                                            financial
           Liaise the process of getting financial Taskforce during 2009 and with micro
                                                                                            institutions on
7.3.9.4    support by handicraft producers         handicraft        producers and      SME
                                                                                            the list to
           form listed financial institutions      association starting from funding
                                                                                            support their
                                                   2010 onwards                expertise
                                                                                            handicraft
                                                                                            production by
                                                                                            end of 2012

             Total cost for action 7.3.9 is                                                                      *                *           *

          * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                          Aqaba Community and Economic Development (ACED) Program –86
                                                                                                                             Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
           Action 7.3.10 Build databases and studies related to the sector (databases of producers, products, marketing outlets, records of sales per product)
                                                                             Resources                                Budget      Budget                   Time Frame
                         Activities                Responsible Entity                       Targets       Budget
                                                                               where                                 Phase 1      Phase 2
                                                                                                         Total (JD)
                                                                             applicable                                (JD)        (JD)      2008     2009     2010   2011              2012
                                                Handicraft        Design,
           Build a database of handicraft                                                                    *           *           *
                                                Training and Exhibition                 First database
           producers on the website in Aqaba
7.3.10.1                                        Center (2008 - 2010) and Software       is available by
           both informal and formal and update
                                                the producers' Association              end of 2008
           the database annually on
                                                (2010 onwards)
                                                Handicraft        Design,
           Build a database of local handicraft                                                              *           *           *
                                                Training and Exhibition                 First database
           products produced in Aqaba
7.3.10.2                                        Center (2009 - 2010) and Software       is available by
           showing raw material quantities
                                                the producers' association              March of 2009
           used, and update the list annually
                                                (2010 onwards)
           Develop an annual agenda for local                                           3000 copies of
                                                Handicraft        Design,                                    *           *           *
           handicrafts exhibitions and outlets                             Graphic      the agenda is
7.3.10.3                                        Training and Exhibition
           opening durations and update it                                 designer     distributed
                                                Center
           annually                                                                     annually
           Promote the exhibitions and outlets                                          100% of 5
                                                                                                             *           *           *
           agenda with all hotels, tourism      Handicraft        Design,               starts hotels in
7.3.10.4   information centers, tour operators  Training and Exhibition                 Aqaba      have
           and tour guides association and on   Center                                  the agenda at
           the internet                                                                 the reception
                                                                                        First    report
                                                                                                             *           *           *
                                                                                        on 2009 sales
                                                                                        record
           Develop annual records for sales of                                          launched end
           local handicrafts in Aqaba showing                                           of Jan. 2010.
                                                Handicraft        Design,
           quantities, product segment, income                             Consultant + Starting from
7.3.10.5                                        Training and Exhibition
           and tourists nationality, and launch                            software     2010 onwards,
                                                Center
           the annual report at the handicrafts                                         each     annual
           dept website.                                                                report        is
                                                                                        launched end
                                                                                        of Jan. of the
                                                                                        following year.
                                                                                                           *             *           *
             Total cost for action 7.3.10 is


           * Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                                                 Aqaba Community and Economic Development (ACED) Program –87
                                                                                                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 Total cost for implementing the Institutional Development strategic plan                  *
 (2008 - 2012) =

 Cost for implementing phase 1 (2008 - 2009) =                                             *


 Cost for implementing Phase 2 (2010 - 2012) =                                             *




      Strategy Component               phase 1 cost         phase 2 cost    total budget

       Product Development                   *                   *               *


            Marketing                        *                   *               *


     Institutional Development               *                   *               *


              Totals                         *                   *               *



* Approximate amounts maybe revealed based on discussions with the ACED Program




                                                                                               Aqaba Community and Economic Development (ACED) Program –88
                                                                                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
VIII.   ANNEXES




                  Aqaba Community and Economic Development (ACED) Program –89
                     Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
ANNEX 1: SCOPE OF WORK

   Conducting a Diagnostic and drafting an Action Plan for the
   Development of the Handicraft Sector in Aqaba


SW # / TO#                     SOW- 001-2008
RFP #
Potential candidate(s):        All consultants
Position:
Local / International:        International
Maximum Level of Effort:
Contract Name:                International Senior Expert in Handicraft Production
Contract Number:
Period of Performance:         April – May 2008
Maximum Level of Effort:       45 days



Aqaba Community and Economic Development Program Background
The ACED Program is a five-year program funded by the United States Agency for
International Development, benefiting the people and businesses of the Aqaba Special
Economic Zone (ASEZ). The program is based in Aqaba city, and is composed of activities
under three major areas:

   •   Component 1 will work to strengthen the government institutions and will be
       working directly with Aqaba Special Economic Zone Authority (ASEZA) and Aqaba
       Development Corporation (ADC);
   •   Component 2 will strengthen private sector to become more competitive, through
       enhancing the capabilities of Micro, Small and Medium Enterprises (MSMEs), and
       supporting training; and
   •   Component 3 will be working closely with the local community to develop its
       capacities and empower NGOs and Community-Based Organizations (CBOs).



Background
There are approximately 2,200 enterprises presently registered in the ASEZ (according to
the records ASEZA records as of November 2007), of which 951 have been or are
beneficiaries of ASEZA et all benefits. Over 50% of local enterprises are sole
proprietorships, 80% employ less than 5 people, and 60% occupy less than 55m2 of space.
Wholesale and retail trade dominates with 55% of enterprises, followed by transport,
storage and communications (10%), and hotels and restaurants (9%). Manufacturing
enterprises comprise over 5% of the total. Overall, the Aqaba enterprise landscape is




                                   Aqaba Community and Economic Development (ACED) Program –90
                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
populated by many small, fragmented enterprises with few larger enterprises that employ
more than 250 people. Looking ahead -- based on ASEZA’s and ADC’s announced and
planned investments -- the main drivers for growth in Aqaba will continue to be tourism
and related services (transport, hospitality, food and beverage, facilities maintenance),
warehousing and logistics, construction and maintenance related trades (electrical,
mechanical, carpentry, etc. ); IT services; and other general professional services. The
planned activities of the ACED Program will primarily focus on targeting three main areas
for MSME expansion: (1) increasing the size of existing enterprises in Aqaba; (2)
encouraging the establishment of new start-ups in Aqaba to meet the growing market
demand, and (3) attracting existing firms in Amman to establish branches or new
operations in Aqaba.
To take advantage of the importance of the tourism sector in Aqaba and to encourage
more women to enter the market while promoting startups, it is proposed that the first
incubator should focus on handicraft related activities. To ensure a correct focus for this
planned incubator, a study should be conducted.


Objectives
The objectives of this scope of work are two fold:
1- Conduct a diagnostic of the handicraft sector in Aqaba, identifying potentialities and
opportunities for the development of the sector as well as threats and challenges.
2- Design an Action Plan for the sector in Aqaba that includes
 1. A proposed Business Plan for the setting up of a handicraft projects' Incubator
 2. A Marketing support to the business plan
 3. A proposed a Human Resources Action Plan
 4. Recommendations to ASEZA, ADC and any others applicable entities upgrading the
   creation of a conducive environment for the development of the sector


Activities required from the Consultant
The following six activities, a minimum, are required of the consultants:
a) Conduct an overview of existing studies of handicraft on a regional and national level;
b) Conduct interviews with handicraft sector representatives and supporting institutions;
c) Supervise and coordinate with the local consultant in carrying out a survey among a
   sample of handicraft MSMEs assessing the current position of the sector so as to define
   a gap analysis of the following:
     • The current technical capabilities of existing handicrafts and workers in Aqaba,
     • Raw materials and supporting industries and services in Jordan, and
     • Institutional Framework in Aqaba
d) Provide the local Marketing Strategy expert with needed advice regarding all
   production aspects for the Design of the overall Incubator Business Plan.
e) Supervise the activities of the local senior consultant in training and institutional
   strengthening in the design of the training action plan for the sector, and




                                    Aqaba Community and Economic Development (ACED) Program –91
                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
f)   Formulate recommendations to create a conducive environment for the development
     of the sector, including the potential transition of incubator activities to a legacy
     institution over the initial years of ACED Program oversight and support

 Required Resources

One International Senior Expert in Handicraft Production, having at a minimum indicated
qualifications and availability as follows:

Qualifications:

     • A university degree or equivalent in a relevant field
     • 10 years experience in carrying out technical diagnostics and production
       management in the Handicraft industry
   • Hands-on knowledge of the Handicraft production technology in the region,
       experience in Jordan would be an asset
   • Established professional track record
   • Superior communication skills and the ability to present policy to various private
       and public sector groups
   • Proficiency in English
Duration: 45 days for each consultant – to be completed by mid May.


Coordination:

The consultant will coordinate with 2 local consultants (tentatively identified as Ms. Rana
AlAkhal and Ms. Ahlam Shabana) and work with ACED Program Component 2 team
members as may be identified at the time of signing the contract.




                                     Aqaba Community and Economic Development (ACED) Program –92
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 ANNEX 2: List of Interviews
 Preparation of a Diagnostic study and a Strategy for the Handicraft sector
                                 in Aqaba
                                            In Aqaba
       Person                  Organization              Post                              Notes
Mariam   Hussein     Al   Al-Thagher Association   Manager                      Produce accessories using
Hourany                                                                         beads
                                                                                Producers are disabled
                                                                                girls from the local
                                                                                community
Doris Ghneim              Jordan Society for            Socio-Economy           She is a designer and
                          Sustainable Development       Program                 currently is working with
                                                        Coordinator             2 NGOs, one in Aqaba
Salam Allabadi            Jordan Society for            Project Manager         named Aqaba Costal
                          Sustainable Development                               Women’s Association,
                                                                                and one in Wadi Rum
                                                                                named "Al-Rahma Coop".
                                                                                They bring in the
                                                                                products from Al –
                                                                                Rahma and do the
                                                                                finishing in Sayidat Al
                                                                                Sahel
Mona J. Hawa              ASEZA                         Tourism Director        They don't have a clear
                                                                                mandate on handicrafts.
                                                                                Yet, they are willing to
                                                                                support local producers
                                                                                by purchasing their
                                                                                giveaways from them.
Fatima Al Hinnawi         JOHUD – Princes Basma         Center Manager          They support producers
                          local community center in                             by including them in local
                          Aqaba                                                 exhibitions in the city and
                                                                                they also produce
                                                                                themselves.
Mohammad Al Thaher        Red Crescent                  Manager                 They have a vocational
                                                                                training facility for women
                                                                                in sewing and have
                                                                                embroidery and
                                                                                traditional crafts.
Rodica Athamneh           Noor Al Hussein               Project Manager         The center was
                          Foundation – Aqaba            and handicrafts         established in Aqaba in
                          Women's Center                designer                1995; they produce
                                                                                tailored and sewed
                                                                                products
Hanan Kafaween            Jordanian National Forum      Aqaba Branch            They produce crafts,
                          for Women (JNFW)              Manager                 mainly baskets, out of jute
Kunuz Thibyan             Women and Child               Center Manager          Produce baskets using
                          Center - JNFW                                         palm leaves and other
                                                                                home accessories
                          Jordanian Al-Hajanah                                  Weavings
                          Association
                          Princess Basma Bazaar                                 Variety of projects

Tayek A. Majali           ASEZA                         City Services
                                                        Manager
Marwan Saleh              Entrepreneur                  Self-employed           Wooden boats




                                         Aqaba Community and Economic Development (ACED) Program –93
                                            Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Karima Dhabet         ASEZA                       Head of the Local
                                                  Community
                                                  Development
                                                  Department
                                                  (LCDD)-ASEZA
Abdullah Manzallawi   Librarian                   Local historian         Gave us a book on
                                                                          handicrafts in aqaba
                      Al Rahma Women’s                                    Work in alignment with
                      Cooperative                                         JSSD making leather
                                                                          boxes, paper and lamps
Hana Kreisem          Aqaba Women                 Manager                 They support home-based
                      Association                                         producers through
                                                                          exhibiting their products
                                                                          in their venue; products
                                                                          range from embroidery,
                                                                          sewing, crocheting and
                                                                          tailoring. The association
                                                                          produces traditional food
                                                                          through their kitchen
In Wadi Rum
Samiha Al Zalabia     Burda Women's               CBO President           Located in Wadi Rum
                      Cooperative                                         Village where they
                                                                          produce several
                                                                          handicrafts but are mostly
                                                                          specialized in traditional
                                                                          clothing made out of
                                                                          camel's fur/skin. They
                                                                          received grants from the
                                                                          SIYAHA program of
                                                                          USAID that helped them
                                                                          in branding their
                                                                          cooperative and
                                                                          developing their products
Khalil A. Abdallat    Wadi Rum Protected          Manager                 They are willing to
                      Area                                                cooperate with Aqaba
                                                                          handicrafts related NGOs
                                                                          to transfer the experience
                                                                          of Wadi Rum
                      Al Salhyeih Production      Manager                 They produce handicrafts
Salam Allabadi        Village                                             from leather, cooper and
                                                                          jewelry and they sell
                                                                          through a shop in the
                                                                          Wadi Rum Visitors'
                                                                          Center
In Amman
Inas Abu Shaheyeh     USAID – SABEQ               Gender integration      She held the post of the
                      program                     workforce and           manager of Wadi Rum
                                                  youth specialist        Information Technology
                                                                          Project;. a project that
                                                                          build the IT capacity of
                                                                          the handicrafts NGOs in
                                                                          Wadi Rum and
                                                                          established their websites
Raed Al Badri         Handicrafts Producers       President and CEO       Established in 2005 under
                      Association                                         the Ministry of Culture
                                                                          with the aim of
                                                                          developing the handicrafts
                                                                          sector of Jordan and
                                                                          helping producers




                                   Aqaba Community and Economic Development (ACED) Program –94
                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
ANNEX 3: Illustrative Project Costs

Illustrative Examples


Following are details of 9 illustrative examples of potential product lines that could be
produced and the type of investment needed. It is crucial to note that before any of the
product areas and lines are initiated, a feasibility study must be done for each product line
that includes a detailed business and marketing plan. Regardless of what product areas and
lines are chosen, the following is recommended:


   o Government Support. There must be two years of government support
     towards technical design and product development. This should include a budget
     for bringing in a mix of local and international design expertise, as well as a budget
     for study tours and exchanges related to the products being developed. Within this
     budget there should also be resources allocated for trade shows and exhibitions,
     both at local and regional levels.
   o Training. Training in various business areas such as pricing and costing, basic
     marketing, product development, management, and entrepreneurship.
   o Target markets. Suitable markets must be identified. Is the product being
     developed for the tourist market, the local market, and what type of tourist market
     is being addressed, etc.?
   o Designers. A designer who specializes in the chosen product area must be hired
     to lead the product development. If products are targeted for a local market, a
     local designer can be used, but if they are being developed for international
     markets, an international designer with expertise in the specified market is likely
     needed.




                                     Aqaba Community and Economic Development (ACED) Program –95
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
1. Textile Bags

Product Line: Embroidered bags

Assumptions:
   o Cost of fabric is estimated at J0D 5 a meter. (1 meter = about 4 yards)
   o One bag is produced in 2 hours
   o Number of working hours during the year = 8640 working hours per year
          o 4 people X 8 hours a day X 270 days a year = 8640 of working hours/year
   o Produce 1 bag every 2 hours, thereby 4320 bags a year
          o    8640 /2 = number of bags = 4320 bags a year
   o Labor is 6 Workers(4 for sewing+2 for cutting and finishing): JD150/month working 6 days a week, 8 hours a
      day

Costs:
a. Equipment cost :
4 Sewing Machines                                                JD 3,000.00

1 Cutting Table                                                  JD 2,000.00
Other basic Tools                                                JD 1,000.00
Total Equipment Cost                                                                                JD 6000.00
b. Working Capital for 3 months:
6 Workers: 150/month working 6 days a week, 8 hours a
                                                                 JD 2,700.00
day
Raw Materials and accessories                                    JD 8,000.00
Overhead Costs                                                   JD 3,300.00
Total Working Capital                                                                              JD 14,000.00
Total Initial Investment Cost                                                                     JD 20,000.00
Costs Per Year                                                                                    JD 56,000.00
Potential Revenue:

# of Bags per year                                               JD 4,320.00
Income generated(4320*20)                                                                          JD 86,400.00

Gross Profit
                                                                                                  JD 30,400.00




                                               Aqaba Community and Economic Development (ACED) Program –96
                                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
2. Paper using local plants' residues

Product Line: blank books, greeting cards, albums, boxes and sheets of paper

Assumptions:
   o Cost of raw material is estimated as following:
          o Cost of collecting recycled materials and plants is 1 cent for 1 kilogram
          o Each kilo produced 30 sheets
          o 400 sheets produced per day
          o In one year 54000 sheets
          o Cost of sheets = 54000/ 30 = 1800

    o       Cost of labor is estimated as following:
    o       14 people are needed to work on this line at the start, a one year cost will include
                o Salaries estimated as 150 JD per month
                o 14 persons x 150 JD per month x 12 months = 25200 JD total first year salaries

    o       Production
                o Books
                            Size of books 5x8" requires 5 sheets per book
                            100 books a day
                            10800 books / year
                o   Boxes
                            2 sheets per box
                            100 boxes a day x 270 days = 27000 boxes

Costs:
A. Equipment cost:
20 Vats                                                              JD 2,000.00

100 Moulds and Deckles                                               JD 1,000.00
2 Industrial Beaters                                                 JD 1,500.00
100 felts                                                             JD 500.00
Total Equipment Cost                                                                                   JD 5,000.00
B. Initial Investment
Working capital                                                     JD 11,000.00
Equipments                                                           JD 5,000.00
Total Initial Investment                                                                               JD 16,000.00
C. Operating Costs for 1 year:
14 Workers: 150/month working 6 days a week, 8 hours
                                                                    JD 25,200.00
a day for 12 months
Raw Materials                                                        JD 1800.00
Rent                                                                JD 12,000.00
Overhead Costs                                                       JD 5,000.00
Total Operating Costs                                                                                  JD 44,000.00
Potential Revenue:

Boxes                                                               JD 40,500.00
Books                                                               JD 32,400.00
Total Potential Revenue                                                                                JD 72,900.00
Gross Profit
                                                                                                      JD 28,900.00




                                                   Aqaba Community and Economic Development (ACED) Program –97
                                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
3. Rugs - Tapestries

Product Line: tapestries, adorned with pictures of traditional Aqaba scenes, Wadi Rum, Petra, representative of
famous artist’s paintings or traditional motifs such as mosques, tea sets, etc.

Assumptions:
The project can product 100 pieces per year, 1 every 3 days
Each piece can be sold for 60JD.

Materials Needed
1 Loom JD100

Costs:
A. Initial Investment for 3 months
Working capital                                                      JD 600.00
Raw Materials                                                        JD 150.00
Overheads                                                            JD 300.00
Cost of 1 loom                                                       JD 100.00
Total Initial Investment for 3 months                                                                  JD 1,150.00


C. Operating Costs for 1 year:
1 Worker: JD 200/month working 6 days a week, 8
hours a day for 12 months                                           JD 2,400.00

Raw Materials                                                        JD 600.00
Overhead Costs                                                      JD 1,200.00
Total Operating Costs                                                                                  JD 4,200.00


Potential Revenue:

Total expenditure                                                   JD 4,200.00                       JD 42,000.00
Total revenue                                                       JD 6,000.00                       JD 60,000.00
Gross Profit
                                                                    JD 1,800.00                       JD 18,000.00
If you want to increase production by 10, then cost is JD 11,500.00 and profit rises to JD 18,000.00




                                                  Aqaba Community and Economic Development (ACED) Program –98
                                                     Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
4. Rugs

Product Line:       High Quality Rugs. One Rug is made every 6 Days and sell for JD 120.00
Assumptions:

    -     1 Rug produced every 6 days,
    -     50 Rugs produced in one year,
    -     Each Rug will be sold for JD 120.00
    -     Material needed is One Loom for JD100.00

Costs:
A. Initial Investment for 3 months
Working capital                                                       JD 600.00
Raw Materials                                                         JD 150.00
Overheads                                                             JD 400.00
Total Initial Investment for 3 months                                                                  JD 1,150.00
C. Operating Costs for 1 year:
1 Worker: JD 200/month working 6 days a week, 8
                                                                     JD 2,400.00
hours a day for 12 months
Raw Materials (produced 50 Rugs per year)                             JD 600.00
Overhead Costs                                                       JD 1,200.00
Total Operating Costs                                                                                  JD 4,200.00
Potential Revenue:

Total expenditure                                                    JD 4,200.00
Total revenue                                                        JD 6,000.00
Gross Profit
                                                                                                       JD 1,800.00
If you want to increase production by 10, then cost is JD 11,500.00 and profit rises to JD 18,000.00




                                                   Aqaba Community and Economic Development (ACED) Program –99
                                                      Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
5. Ceramic 1

Product Line:      Several ceramic pots and ceramic home decorations
Assumptions:

    -     Project can produce 50 pieces a day X 270 days = 13500 a year

    -     Potential revenue = JD 8.00 per piece X 50 pieces X 270 = JD 108,000.00

Costs:
A. Initial Investment for 3 months
Working capital                                                   JD 16,425.00
Equipments                                                        JD 15,000.00
Total Initial Investment for 3 months                                                                JD 31,425.00
C. Operating Costs for 1 year:
5 Workers: JD 150/month working 6 days a week, 8
                                                                   JD 9,000.00
hours a day for 12 months
Energy                                                              JD 27,000
Painter                                                            JD 2,700.00
Overhead Costs                                                     JD 10,000.00
Raw material                                                       JD 17000.00                       JD 65,700.00
Equipments
    - Kiln                                                        JD 10,000.00
    - Glazing room                                                 JD 2,000.00
    - Tools                                                        JD 3,000.00

Total Equipments                                                  JD 15,000.00


Potential Revenue:

Total revenue                                                     JD 108,000.00

Total expenses                                                     JD 65,700.00

Gross Profit                                                                                        JD 42,300.00




                                                Aqaba Community and Economic Development (ACED) Program –100
                                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
6. Ceramic 2

Product Line:      Several ceramic pots and ceramic home decorations
Assumptions:

    -     Project can produce 100 pieces a day X 270 days = 27000 a year

    -     Potential revenue = JD 8.00 per piece X 100 pieces X 270 = JD 216,000.00

Costs:
A. Initial Investment for 3 months
Working capital                                                    JD 32,850.00
Equipments                                                         JD 15,000.00
Total Initial Investment for 3 months                                                                JD 47,850.00
C. Operating Costs for 1 year:
10 Workers: JD 150/month working 6 days a week, 8
                                                                   JD 18,000.00
hours a day for 12 months
Energy                                                              JD 54,000
Painter                                                            JD 5,400.00
Overhead Costs                                                     JD 20,000.00
Raw material                                                       JD 34000.00                      JD131,400.00
Equipments
    - Kiln                                                         JD 10,000.00
    - Glazing room                                                  JD 2,000.00
    - Tools                                                         JD 3,000.00

Total Equipments                                                  JD 15,000.00
Potential Revenue:

Total revenue                                                     JD 216,000.00

Total expenses                                                    JD 131,400.00
Gross Profit                                                                                        JD 84,600.00




                                                Aqaba Community and Economic Development (ACED) Program –101
                                                    Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
7. Glassware

Product Line: handmade glasses and glass home decorations
Assumptions:

    -    Project can start with 4 workers
    -    Each worker can produce 10 pieces a day
    -    In one year there is 270 days
    -    4 workers x 10 pieces a day x 270 days = 10800 pieces a year
    -     Each piece can be sold by 5 JD
    -    10,800.00 pieces x 5 JD per piece = JD 54,000.00 a year

Costs:
A. Initial Investment
Working capital                                                  JD 6,350.00
Oven                                                            JD 10,000.00
Tools                                                            JD 2,000.00
Total Initial Investment                                                                          JD 18,350.00
B. Operating Costs for 1 year:
4 Workers: JD 150/month working 6 days a week, 8
hours a day for 12 months                                        JD 7,200.00
(4x150x12 =
Energy cost                                                     JD 10,000.00
Overhead Costs                                                    JD 500.00
Raw material                                                    JD 7,700.00
Equipments
Oven                                                            JD 10,000.00
Tools                                                            JD 2,000.00

Total Equipments                                                JD 12,000.00
Total Operating Cost                                                                               JD 25,400.00
Potential Revenue:

Total Operating Cost for One Year                               JD 25,400.00
Total revenue                                                    JD 54,000.00

Gross Profit                                                                                     JD 28,600.00




                                              Aqaba Community and Economic Development (ACED) Program –102
                                                  Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
8. Food

Product Line:     Variety of Different Jams Made from Locally Sourced Fruits
Assumptions:

    •    Price of jar of jam will be 1.5 JD
    •    600 jars of jam can be made a day
    •    Potential revenue = 600 X1.5 X 270 = JD 243,000.00
    •    Cost of fruit = JD 0. 50 per jar
    •    Cost of Jar = 0. 50 per jar
    •    Cost of raw materials per year =1JD X 600/day X270 = JD 162,000.00
    •    4 workers will work on this project

Costs:
A. Initial Investment for 3 months
Working capital (4x150x3 = 1,800.00 JD)                             JD 1,800.00
Raw material during 3 months                                        JD 40,500.00
Equipments                                                          JD 5,000.00
Total Initial Investment for 3 months                                                                 JD 47,300.00
B. Operating Costs for 1 year:
4 Workers: JD 150/month working 6 days a week, 8
hours a day for 12 months                                           JD 7,200.00
(4x150x12 =
Overhead Costs                                                      JD 6,950.00
Raw material                                                       JD162,000.00
(600 jars/day x 270 days a year x 1.00 JD production cost/
jar)
Equipments                                                          JD 5,000.00
Total Operating Cost                                                                                 JD 176,150.00
Potential Revenue:

Total Operating Cost for One Year                                 JD 176,150.00
Total revenue                                                     JD 243,000.00
600 jars/day x 270 days x 1. 5 JD price/jar =
Gross Profit                                                                                        JD 66,850.00




                                                 Aqaba Community and Economic Development (ACED) Program –103
                                                     Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
9. Jewelry

Product Line:     Variety of cultural handmade jewelry
Assumptions:

    •    6 people 150 JD X 12 = 10,800
    •    Raw materials = Silver, brass and semi-precious stones
    •    Cost of equipments = 10,000 JD
    •    Average price is 20 JD
    •    Per person a day = 20 pieces a day X 20Jd X 270 days = 108,000 – on average

Total working capital = 10800


Costs:
A. Initial Investment for 3 months
Working capital                                                       JD 2,700.00
(6 persons x 3 months x 150 JD per month)
Raw material (20% of revenue)                                         JD 5,280.00
Revenue for first 3 months = 20 pieces/day x 66 days x 20
JD price of piece = 26,400.00 JD
20% of 26,400.00 = 5,280 JD
Equipments                                                            JD10,000.00
Total Initial Investment for 3 months                                                                   JD 17,980.00


B. Operating Costs for 1 year:
4 Workers: JD 150/month working 6 days a week, 8
hours a day for 12 months                                             JD10,800.00
6 persons x 150 JD/person x 12 months = 10,800
Overhead Costs                                                        JD 2,700.00
Raw material (20% of revenues)                                       JD 21,600.00
20% (20 pieces/day x 270 days x 20 JD per piece)
20% x 108,000.00 = 21,600.00
Equipments                                                           JD 10,000.00
Total Operating Cost                                                                                   JD 45,100.00
Potential Revenue:

Total Operating Cost for One Year                                   JD 45,100.00
Total revenue                                                       JD 108,000.00
600 jars/day x 270 days x 1. 5 JD price/jar =
Gross Profit                                                                                          JD 62,900.00




                                                   Aqaba Community and Economic Development (ACED) Program –104
                                                       Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
      Cost Benefit Analysis for the Handicraft Strategy
The investment cost, the generated revenues and profit and number of job created by the
nine identified projects are:

                         Investment                                                  # of
                                          Revenue (JD)          Profit (JD)
                            (JD)                                                   Employees
     Textile Bags           16,000             86,400              30,400                6
     Eco-friendly           16,000             72,900              28,900                14
       Tapestry             11,000             60,000              18,000                10
           Rugs             11,000             60,000              18,000                10
     Ceramic (1)            31,427            108,000              42,300                6
     Ceramic (2)            47,852            216,000              84,600                12
      Glassware             18,350             54,000              28,600                4
           Jam              47,300            243,000              66,850                4
       Jewelry              18,000            108,000              62,900                6

  Total during the 2
                           216,929           1,008,300            380,550                72
     first years
      third year           650787             3024900             1141650               216
       4th year            1952361            9074700             3424950               648
       5th year            3904722           18149400             6849900              1296


According to the above table the two years of preparation will generate only nine projects
with limited investment. The success achieved during the starting period and the
implementation of the Handicraft Action Plan will permit to triple the achievements during
the third year, to triple again the achievements during the fourth year, and to double for
the fifth year.
Accordingly, the benefits from the implemented Strategy and Action Plan will be as
following:


                            Sales Tax of 7 %        Income taxes of
   Government Benefits                                                          Total (JD)
                                  (JD)                  5 % (JD)
3rd year                          211,743.0                57,082.5                 26,8825.5
4th year                          635,229.0               171,247.5                 806,476.5
5th year                        1,270,458.0               342,495.0               1,075,302.0
Total                           2,117,430.0               570,825.0               2,150,604.0




                                     Aqaba Community and Economic Development (ACED) Program –105
                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
ANNEX 4: Methodology for Selection of Product
Areas

This section identifies the major product areas, analyses their potential and recommends
implementation activities for product development. Initial product areas were based on a
diagnostic of identified skills of population, current areas of production, cultural heritage
and availability of local resources. Based on these criteria set, a list of 10 core areas were
identified, but not ranked:
   •   Felted Products
   •   Palm Leaf Products
   •   Ceramics
   •   Textiles
   •   Jewelry
   •   Wood Products
   •   Eco-friendly Products (glass, paper, tin, recycled products)
   •   Food
   •   Leather
   •   Sand Bottle Art


Next, in order to prioritize these 10 areas, an additional set of criteria was used, weighted
(weighed?) and ranked to further identify product areas. The following list shows the
ranking codes and the weighted scores used for each criteria set.
        Ranking Code                     Rank Value                         Ranking Meaning
              A                              4                                 Very High
              B                              3                                    High
             C                               2                                  Average
             D                               1                                    Low


The exception to the above was with production costs, which reversed the order of
importance.
Weighted Scores
   •   Availability of raw materials            4
   •   Potential production lines               4
   •   Potential for local tourists             4
   •   Potential for international tourists     4
   •   Cultural heritage linkages               4
   •   Organizational capacity                  3
   •   Product cost                             3
   •   Skills of workforce                      2
As a team the 10 identified areas were discussed and ranked together. The following shows
the team’s ranking by code, then by number and finally total score.




                                    Aqaba Community and Economic Development (ACED) Program –106
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
Team’s ranking by code




                                                     Palm                                                                                                         Sand         Felted
        Prioritization Criteria                                   Ceramics      Textile     Jewelry    Wood         Eco-friendly       Food        Leather
                                                    Leaves                                                                                                        Bottle      Products

ORGANIZATIONAL CAPACITY                               C              D            B-          C         C               B                B-           C             A                D
AVAILABILITY OF RAW MATERIALS                         A              A            A           C          B              A                A            C             A                B
PRODUCTION LINES                                      B              A            A           A          B              B                A            A             A                A
MARKET (INT. TOURISTS)                                C              D            B+          C-        C               B-               B            C             A                D
MARKET (LOCAL TOURISTS)                              A-B            B-C           A           A         C               A                A            B             A                A
SKILLS OF WORKFORCE                                   A              B             B          C         B-              A-               B            C             A                A
PRODUCTION COST                                       B              A            A           A         C               A                A            D             D                A
CULTURAL HERITAGE                                     A              D            A           B         C+              D                A            D             A                C

       Prioritization                  Palm                                                                                             Leather                             Felted
                                                      Ceramic         Textile     Jewelry     Wood     Eco-Friendly1617       Food                    Sand Bottle
          Criteria                    Leaves                                                                                                                               Products
      ORGANIZATIONAL
                                          2                 1             2.5          2           2          3                2.5            2              4                  1
           CAPACITY
    AVAILABILITY OF RAW
                                          4                 4             4            2           3          4                 4             2              4                  3
           MATERIAL
      PRODUCTION LINES                    3                 4             4            4           2          4                 4             1              1                  4
   MARKET (INT. TOURISTS)                3.5               2.5            4            4           2          4                 4             3              4                  4

 MARKET (LOCAL TOURISTS)                  3                 4             4            4           3          3                 4             4              4                  4
    SKILLS OF WORKFORCE                  2                  1             3.5        2.5         2            2.5              3               2             4                   1
     PRODUCTION COST                     4                  3              3          2         2.5           3.5              3               2             4                   4
     CULTURAL HERITAGE                   4                  1              4          3         2.5            1               4               1             4                   2
        Total points                    25.5               20.5           29        23.5        19            25              28.5            17            29                  23



16 Includes glass, tin, bottles, paper, soap etc.




                                                                                                                     Aqaba Community and Economic Development (ACED) Program –107
                                                                                                                         Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
The following diagram shows the prioritization of product areas the team came up
with.



                         Prioritization of Product Areas

            Priority #                        Product/s

                1                      Textile and sand bottles
                2                                Food
                3                             Palm leaves
                4                  Eco-friendly recycled products
                5                               Jewelry
                6                          Felted products
                7                              Ceramics
                8                          Wood products
                9                               Leather




                                 Aqaba Community and Economic Development (ACED) Program –108
                                     Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
 ANNEX 5: HISTORICAL PRODUCTS ONCE
 PRODUCED IN AQABA
Translated from the book “Heritage and Handicrafts in Aqaba” by Abdullah Manzallawi
Palm Leaf Products:
1-   Various sizes and styles of brooms made from the staff of the palm leaf, used for
     cleaning homes
2-   Fans
3-   Rope, al-shalq, was made from the lower end of the bark and was used to sew things
     together when working with palm.
4-   Woven mats for the floor and for sitting on
5-   Baskets of all sizes
6-   Hats
7-   Pillow cases
8-   Water holders made from the main bark when its divided up
9-   Leaves used as fillers for mattresses and pillows
10- Boats from the palm bark
11- Furniture, chairs, tables, and baby beds
12- Used in buildings materials for ceilings
Mud Bricks were used in building homes and thereby many of the utensils where also
made of mud such as:
1- Urns
2- Chicken coops
3- Incense burners for homes
Corals where also utilized, especially for household items such as :
1- Ashtrays from corals
2- Ashtrays from muscle shells
3- Pipes for smoking
4- Women’s accessories such as necklaces
5- Plates for fruits
6- Decorations on clothes and ornaments
Various corals are regarded as a sign of good luck and some have special functions;
1- Uod Al-Yessr – overall good luck




                                    Aqaba Community and Economic Development (ACED) Program –109
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan
2- Al-Barouka Shell – brings money
3- Al-Nar Murjan ( Fire Coral ) for stopping children from drinking mother’s milk
Fishing:
•   As fishing was the main industry, the people of Aqaba were known for their salted fish
    (fasekh), and the embalming of fish.
•   In the fishing trade, nets were originally brought from Gaza or Egypt, but in the 1940’s
    the local population started making their own nets. The nets used were made of steel
    wiring and had different names for their different shapes.
•   The scales of fish were dried, and then used to make ornamental flowers, that were
    then painted.
Sand Art:
The art of sand designs in glass bottles dates back to late 1940’s in Aqaba. There are two
historical versions regarding the origin of putting sand designs into glass bottles. The first
version is that there was evidence in tombs found in Petra that glass urns were found with
colored sand designs, and this was later revived with the region's revival.
The second version is that some European visitors came to the region, found the different
colored sand so unique that they started collecting the different colored sand in the area of
Petra and Aqaba, and the art was developed in this manner.
According to the book, the first verified person in Jordan to start bottling the sand to give
to tourists was Khalifah Ahmad Kreishan in 1885. He was from the area of Ma’an near
Petra.


Musical Instruments:
Al-Semsemieh – A string instrument with a harp-like structure utilizing 5 strings
Al-Marawas – A long drum with sheep skin on the sides
Al-Taarr – a frame drum (thin drum of 15 cms)
Al-Bazara - a drum with a metal bell structure
Al-Shababah – flute
Al-Rababa – a string instrument




                                    Aqaba Community and Economic Development (ACED) Program –110
                                        Handicraft Sector in Aqaba – Diagnostic, Strategy and Action Plan

				
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